Demand for property in City of London pushes up home prices
The City of London and its surrounds are now firmly part of the prime central London residential property market as increased job creation, coupled with strong buyer demand, has underpinned property price growth.
In fact, a number of economic and cultural factors have transformed the areas surrounding the City of London into some of the capital’s most active prime residential areas, according to a new report from real estate firm Knight Frank.
Its latest analysis shows that transaction levels in the area, which runs from Farringdon in the West to Whitechapel in the east, were 19% higher in 2014 compared to 2012, and 42% higher than in 2011.
‘Growing demand has underpinned price growth, which has outperformed prime central London over the last three years and demand for housing has also been spurred by the relative value that is on offer, in terms of price per square foot, compared to the more traditional prime areas,’ said Oliver Knight of the firm’s residential research team.
The report points out that the area benefits from existing high quality property stock including Georgian terraces as well as period commercial buildings, some of which have already lent themselves to conversion into large scale, open plan residential buildings not dissimilar to Tribeca in New York.
The northern central quarter encompasses City Road, Old Street and Shoreditch and to the south it runs through the City of London as far as Tower Bridge and the outskirts of Midtown. The area boasts a wide cultural offering which includes Smithfield Market, Columbia Road Flower Market, Whitechapel Art Gallery and Brick Lane. Proximity to these, as well as a host of other landmarks, has helped contribute to rising demand from buyers for property in the area.
In addition, the report points out that the evolution of new commercial areas has bought many thousands of new workers to the area, acting as a further boost to demand. This has tempted developers to tap into a need for supply of new residential space.
‘The activity in the area, in economic terms as well as development, is also helping to feed the demand for property. The fact that the City and its surrounding areas will be served by three Crossrail stations at Farringdon, Liverpool Street and Whitechapel, with extra station entrances at Barbican and Moorgate, is only likely to add to its appeal to both commercial and residential occupiers,’ explained Knight.
‘We expect that the mix of development, job creation and regeneration in the area means that its draw to homebuyers and investors is likely to continue to grow in the coming years. Further improvements to infrastructure and continued re-generation of the area will result in new amenities being delivered, as well as improvements to the public realm. This is likely to increase buyer demand for residential property in the area and could underpin future price rises,’ he said.
The report also explains that transport is a key factor as it not only strengthens the attractiveness of the area for business, but any improvements are an added benefit for those already living there. At present, the areas discussed in this report are well served by the tube and over ground network. From 2018 residents will be able to access the high speed Crossrail train from Moorgate, Farringdon or Barbican, cutting travel times across the city and to major airports.
There has also been much discussion about Crossrail 2, a second high speed rail line connecting South West London to the North East. One of the key central stations for Crossrail 2 will be Angel, at the other end of City Road from Silicon Roundabout, adding to the transport links already in the area.
‘These infrastructure developments, as well as the delivery of new homes should serve to underpin demand in the residential sector,’ Knight concluded.