Luxury Estate Agent Kay & Co, is predicting a surge of interest in parts of central London, which are about to become London’s new tech hubs, as more global tech giants plan to open offices. Joining Apple in Battersea Power Station, Google in King’s Cross, Twitter in Soho, Facebook and Instragam in Fitzrovia, is the latest tech giant – Snap, the parent company of Snapchat, which has announced it is moving its international headquarters to Fitzrovia – making them the latest in a series of tech companies to see promise in an independent Britain, post Brexit.
As tech giants move into these areas what does this mean for property prices? Based on previous data from Cambridge, Reading and Oxford, which were all transformed into tech hubs, and which have all seen a surge in property prices of up to 60% in five years, Kay & Co is predicting a similar pattern in Fitzrovia, Soho and Kings Cross. New boutique schemes focused around these new tech and social media companies are ideal for investors, wealthy students and professionals looking for a property to be near work in the heart of central London as they offer excellent transport links, quality design and high specification finishes with porters / concierge and security.
Martin Bikhit, Managing Director at Kay & Co commented: “Now is the time to consider investing in Fitzrovia, Soho and Kings Cross. Tech giants are choosing to move their international headquarters, ramping up their investment in the UK. It happened to Cambridge, Reading and Oxford, where house prices boomed when tech companies moved in and we confident it will follow in London. Fitzrovia, traditionally an art area famous for the rag trade is fast becoming a creative tech hub and with Snap moving in, the area will certainly bring in a much younger crowd.”
Rental values in Fitzrovia, Bloomsbury & Soho averaged £659 per week for flats and £1,025 per week for houses in Q2 2017. Average flat prices in Fitzrovia, Bloomsbury & Soho are now 52% higher than they were 5 years ago, with buyers paying £534 more per square foot.
Martin commented: “We have seen a new breed of buyers – lots of international investors and savvy domestic ones buying, as they know there will be a long-term supply of good quality, high earning, job secure tenants in these key areas. We are predicting that we will see further growth over the coming years, especially if the extra 3% stamp duty levy on buy-to-let is lifted.”
Despite Apple choosing Battersea with its 2,000 employees, this area is a less attractive investment when compared with Fitzrovia, Soho and Kings Cross. Flooded with too much stock, around 20,000 new homes planned, there is no control on supply and build in the area with rental prices driven down as a result.
Martin added: “Supply in areas such as Fitzrovia, Soho and Kings Cross is being carefully controlled to ensure a flow of new boutique and high end apartment schemes in the coming years. This strategy ensures that property prices remain buoyant and rental yields fair. Regeneration of these areas is vital and with more tech and social media companies moving in, we are expecting there to be a rise in investors seeking properties to rent and professionals who want to be close to work in a vibrant buzzy business hub.”
There are several reasons why these giants are choosing London. Despite there being many other cities around the world less expensive, the weaker pound is attracting companies previously put off by high relocation costs. British universities continue to rank among the best in the world providing the next generation of young workers. Meanwhile the government has announced a number of measures to help businesses including £1.9bn on boosting the UK’s cyber security to make it a safer place to trade and conduct deals and £1bn in super-fast broadband and 5G technology.
The new King’s Cross area provides companies and office workers with 3.4 m sq ft of space and 19 new buildings which have attracted Google – 2,500 employees, The Guardian Group, Universal Music Publishing and See Tickets with 1,000 employees.
Average flat prices in Kings Cross are now 48% higher than they were five years ago, with buyers paying £311 more per sq. ft. 53.7% of properties sold in Q2 2017 sold within three months, compared with 24.5% for the rest of central London.