With keynote speakers and panel members from LandSec, Savills, British Land and Shoosmiths, to name but a few, this year’s EG London Development Summit was a day rich in varied opinions and predictions in relation to the future landscape of London’s residential and commercial property market.
This variety of opinion was abundantly clear when guest speakers looked ahead to the May 2018 local elections and the unknown future effects of Brexit. But all variety aside, one central topic was the striking recent growth in London’s residential market, and the question mark over how long it can continue for.
Katy Warrick, Head of London Residential Development Research at Savills, highlighted that in the last 10 years, London’s house prices have grown a staggering 70%. When combined with the average London house deposit of £99K, against an average London wage of £35K, it’s no surprise that first time buyers are finding it increasingly difficult to get their foot on the all-important property ladder.
The national statistics speak for themselves. Across the UK, there are 28% more first time buyers than 3 years ago. Comparatively, however, there are 13% less first time buyers in London in this same time period.
The reality is that the disparity between earnings and house prices in London continues to grow. Deloitte recently had to buy properties in order to provide homes for some of their London staff, as residential property in the Capital was just too expensive.
But how long can this affordability chasm continue to grow for? What struck me was that even professional forecasters, such as Noble Francis, Economic Director at Constructive Products Association, feel that due to the huge amount of variables, they are not able to predict beyond 2019.
With thanks to Charlotte Cripps, Key Account Manager at tmgroup