好色先生TV

Fears abound that the bottom may fall out of the 鈥減rime鈥� residential market in London, but new research from Arcadis shows the pipeline is still buoyant.

Over 35,000 鈥減rime鈥� homes are to be built in the capital over the next ten years - a 40% increase on 2014鈥檚 25,000 homes - with a combined estimated sales value of over 拢77bn, according to the report.

It is this 40 million plus sq ft to be constructed, which suggests that the high-end residential market in London is still attractive, Arcadis said.

Unsurprisingly Chelsea & Fulham top the table as the location with the most homes in development on the back of Wanda One鈥檚 Nine Elms, Capco鈥檚 Earls Court, Berkeley鈥檚 Vista and Battersea Power Station Development Company鈥檚 redevelopment at the power station.

It therefore corresponds that Chelsea & Fulham top the table with the highest estimated sales values - sitting at 拢20bn - while Southbank has second spot on both tables with a potential 拢14.2bn worth of sales from schemes such as the Canary Wharf鈥檚 Shell Centre and Berkeley鈥檚 One Blackfriars.

Speaking to 好色先生TV Mark Cleverly, head of commercial development at Arcadis, said the pipeline of 鈥減rime鈥� homes in London was still growing despite the uncertain outlook.

However, some developers, he said, are looking at experimenting with different product mixes and permutations for schemes, such as reconfiguring towards smaller homes or turning assets into office space.

Cleverly added that the 鈥減endulum is swinging the other way鈥� now following years of office to residential conversions. This is because the residential market has topped out and investors look to long-term revenue producing schemes, which offices provide, he said.

Cleverly admitted that the stamp duty changes were 鈥渟trangling off demand鈥� at the top end, which was also affecting mobility in the rest of the market. 

There was also the argument that the changes could actually end up reducing the number of affordable homes in the capital as developers are deterred from building prime residential which is required to have a proportion of affordable residential, he said.

Meanwhile, Arcadis鈥� research also showed that construction costs and land values are continuing to rise and in turn are increasing input costs, which, Cleverly said, could on top of softening buyer demand see margins affected thereby increasing the chances that developers look to the more buoyant office market.