Always known for its iconic architecture, arts, name brand shopping and museums London still remains one of the most vibrant cities in the world. As well as it being an excellent jumping off point to Europe and beyond. It is also becoming the city of choice for international buyers of property for either living or investing or both. Originally Middle Eastern wealth dominated the property sector when it came to international investment in commercial and residential property. Years later the new found wealth in Russia and now Asia are dominating the property marketplace. The fact that London had also become one of the top cities in the world for banking and finance was helpful as well. No borough in London it seems is immune to property construction or regeneration. Cranes and workers in hardhats abound and more developments are on the way.
But what does this mean for London in the long term? The cost of residential property as it continues to rise does not seem to be deterring those who want to purchase. Particularly from outside the country. In the years to come what will London living be like?
Quality of Living
There is no question that for those investors and future residents the quality of the property will be quite good. New modern, sleek residential towers with all types of amenities and refurbished stately mansions and former embassies will eventually become prime addresses throughout the city. Some examples include the massive regeneration of the Battersea Power Station.
Battersea Power Station
The decades old derelict 40 acre site was bought for £400 million by Malaysian conglomerate Sime Darby and SP Setia with plans were to start construction this September, 2013 to build 3,500 luxury homes along with offices, retail outlets and restaurants that will not only feature studio apartments starting at £350,000 but prices climbing upwards to £6 million for a penthouse. Not to mention a £1 billion pound commitment to extend the Northern Line for the new tube station being built for those living and working in the area.
The first phases of the residences sold out quickly this year but as of yet the construction has not really begun on the property. Many of the buyers are of Asian origin. But controversy, which the Battersea site is no stranger to, persists especially when it comes to the iconic four chimneys being pulled down and replaced. Also the issue which can be found throughout London is the cost of affordable housing and section 106 agreements that the boroughs negotiate with developers.
Other areas on the development list include Elephant and Castle which is also undergoing a multi-year plan by Land Lease and their partner Southwark Borough Council to return the area to its once known description as the ‘Piccadilly of South London’ a shoppers haven. This area will also require upgrades to the Elephant and Castle tube station and has received from London Mayor Boris Johnson a financial commitment to upgrade the roads for the first time in years. Like Battersea, the £1.5 billion development One the Elephant will feature a 37 story tower with a four story with 287 apartment homes and an adjacent leisure and sport centre. The plan boasts energy efficient, healthy living with sweeping views of the London skyline.
Adjacent to Battersea Power Station is the Nine Elms commercial and residential developments along with the new American Embassy and diplomatic quarter. Like the Americans 20 other nations are selling off their diplomatic buildings and moving across the river or other locations to newer more modern facilities.
The Canadian High Commission property sold for £306 million and is located at One Grosvenor Square, one of the worlds most sought after addresses. Abhishek Lodha, managing director of Lodha Group which acquired the building, said: ‘The acquisition of this marquee asset overlooking London’s most renowned garden square, in the heart of Mayfair and in close proximity to Bond Street and Mount Street is a great opportunity for our company.’ Once again this prime property will be redeveloped as an apartment building at £1 billion.
The Brazilian embassy, on Green Street, Mayfair, fetched £40 million, with one agent describing the diplomatic market as a ‘goldmine’.
The Brazilian Embassy
Also available if you want a house with an outstanding location and address is a property on 94 Piccadilly across from Green Park, Cambridge house. Formerly the Naval and Military officers club the property site was purchased by Reuben Brothers in 2011 for £130 million and is undergoing a multi-year refurbishment to become a private residence that could fetch when completed £250 million.
What this all will bring to London is high quality luxury living and that will probably once again be mostly purchased by outsiders. All of these development schemes from these to others from Chelsea Barracks to Earls Court and so on will provide those who can afford to purchase a high quality lifestyle to do so.
Quality of Life
The acceleration of growth in London is expected to keep pace for the foreseeable future. As expected this will bring to the forefront a number of key issues for the city.
Planning Resource reported this May that , ‘According to Office for National Statistics (ONS) projections, which provide estimates of the future population of English regions, all regions of England are projected to see population growth over the 10 year period to mid-2022 but the rate of that growth varies. …with London projected to grow the fastest, by 13 per cent over the 10 year period, the figures show.’ That would amount to almost one million new residents by 2020.
Sir Andrew Green of MigrationWatch said: ‘These figures underline the massive impact of immigration on London. I hope the candidates for mayor will take them into account when they ask for the votes of Londoners. Both Mr. Johnson and Mr. Livingstone are trying to avoid the subject.’
Some are asking how many of these property buyers will be part or full time residents or are they just purchasing as an investment or rental only to try and sell once the property boom cycle has faded.
One of the biggest issues and most obvious is the ability to have adequate transportation to handle the influx of new residents as well as tourists.
In May 2010 the Mayor’s Transport Strategy was made public setting the agenda for a plan over a 20-year period to help control traffic congestion.
Plans include ‘building more road tunnels to free up space above ground for cycle lanes, green spaces and new developments, as well as revitalising high streets across the city.’
Additionally he has continued since this plan was released to recommend a new airport,
’The Mayor has stated that only an efficient hub airport serving London and the South East will be able to consolidate this demand and enable airlines to offer the widest possible range of routes and frequencies.
He is firmly against expanding Heathrow because of the potential increase in noise pollution, so is instead supporting the construction of a four-runway hub airport away from densely-populated areas east of the Capital.’
Another recommendation is the addition of ‘Crossrail 2 …high-frequency, high-capacity rail line through London, and in to Hertfordshire and Surrey.’ And also ‘improving suburban railways and cycling infrastructure, tackling vehicle emissions’.
Crossrail 2 tunnel under London
Along with a growing population the issue of providing health services to London was outlined in a NHS report this past October, 2013 Anne Rainsberry, Regional Director of NHS England – London said:
“We need to look more at how we can help people to stay well, rather than focusing on treating them once they are ill. Particularly for the increasing number of people living with long term conditions we need a step change in the way care is planned with patients and the way we use technology to support people.
“We have to do more with our existing budgets to keep the NHS free at the point of care. Based on our expectations of patient demands and that we expect a period of flat financial growth we are likely to have an affordability gap of £4 billion in London by 2020.
“Investing more in hospitals is not the answer; we need to focus more on prevention and improve our primary and community care services to coordinate services closer to where patients live.”
The report also stated, ‘Health inequalities and the capital’s growing demand for healthcare from a ballooning and ageing population means the existing model of NHS health and care is unsustainable.’
Other services including education and the continuing problems associated with affordable housing will remain. Many of these new property developments will require a number of years to compete so hopefully local councils and the Mayors Office can continue to put forward plans to make life manageable in London. So far they seem to be keeping up with it all.
By Kevin Murphy: www.kevinmurphy.london