8:54 AM, 12th September 2011, About 10 years ago 1
Property investors are ready to see prices at least double in some London hotspots, according to estate agents Knight Frank.
Some neighbourhoods may see prices shoot up by up to 140 per cent by the end of 2016, says the study.
The findings reveal different price drivers for neighbourhoods across the capital – but two main factors that are due to influence prices are the Crossrail project and redevelopment of the landmark Battersea Power Station.
Crossrail is Europe’s largest infrastructure project aimed at linking the east and west suburbs to Heathrow Airport by digging huge tunnels beneath London.
The Battersea Power Station redevelopment will deliver hundreds of new homes and will also host the new US Embassy.
“London is a really seen as safe haven for global money. We ran some figures showing how prime property is doing in terms of asset classes. It beat the FTSE 100 tracker over the last 10 years by quite a long margin,” said Grainne Gilmore, Knight Frank’s head of UK residential research.
“It certainly gives gold a run for its money,” she added.
Knight Frank pinpoints 13 neighbourhoods in the capital which are predicted to outpace even the 30 per cent house price rises forecast for prime districts in the city centre before 2015.
“There is a possibility we could see strong double-digit growth by the end of this year. The figures just keep getting stronger,” said Gilmore.
Data from the Land registry shows house prices have fallen in all areas outside London in the past 12 months.
“We definitely wouldn’t class what is happening at the moment as a bubble. The fundamentals of the market in London are quite different to what they were in the rest of the UK (before the property crash),” Gilmore added, as buyers are cash-rich and not reliant on cheap credit.
Meanwhile property consultants CB Richard Ellis reckon major redevelopments can add at least five per cent to house prices and can only improve the London residential property market – and cite the Olympics as an example, which have lifted house prices in some areas of East London by 14 per cent.
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