London has slowly become a hub for residential towers and luxury new build homes both in the City and West End. The Beauchamp Estates researched about the price premium enjoyed but not shared by Docklands.
It was said that the analysis of newly formed and second homes pricing and sales resulted to three very definite finance-driven residential industries in London.
Regions are ranked according to sales value where London’s West End is at the top. This is often the choice of private investors, hedge funds and private family offices. Next in line is the City of London, where many leading corporations and the Bank of England are found. The third on the list is Docklands, which is the leading competitor of the City and is where many global banks – leaders in the market – are found.
In this study, it was found out that in the past few years – there was a rise in new residential development values and sales within the City specifically at the EC2 postcode covering the Northern areas of London City from Old Street going to the Bishopsgate, Threadneedle Street and Aldergate.
Between June 2013 and May 2014, the average sales price of apartments stands at £845,280 and it has 355 sales during these period. It is comparable to the equivalent average sales price of £1.4 M in West End (W1) that has 488 sales and an average of £397,135 in Docklands that has 1,531 sales.
It is said that the newly build developments achieved strong price premium compared to second-hand stock in West End as well as in the City of London housing industries. This highlighted the potentially lucrative returns, which developers can achieve in both markets.
According to Beauchamp Estates, the price premium of new homes in London City emphasizes the luxurious and high end homes being built there. This is prior to the 2010 when the City did not have premier housing market unlike in West End.
New homes values in 2010 within London have sold consistently over the years whether premium to second-hand. In 2007, a second-hand home in London has an average price of £520,000 as opposed to £270,000 for newly constructed homes.
In addition, several flagship developments in London have helped increased values and improved stock quality since 2010. This helped the City catch up with West End. In 2010, the Frobisher Crescent by United House ranked first. It is a nine-story building where properties sold out with an average price of £623,743. Another project built by London Square in Leonard Street where properties were sold at an average of £646,500 in 2013. Finally, The Heron is the 47-story skyscraper project with sales that enjoyed as much as 11% premium compared to second-hand properties sold within the same year.
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