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Residential Construction Increasing In City Centre

By +Eric Jafari

Residential Construction Increasing In City CentreConstruction activity in London is moving out of the suburbs, according to a recent survey. The Drivers Jonas Deloitte London Residential Crane Survey, which monitors every active residential scheme of more than 50 units across Greater London, revealed that a higher proportion of construction is now taking place in the city centre.

This is good news for property investors, with rental demand continuing to be highest in central locations. However, thus far supply has been unable to keep pace, despite the sector remaining resilient during 2012, with 37,304 units now under construction across 236 schemes. Drivers Jonas Deloitte partner and head of research Anthony Duggan told The Construction Index: "While new construction starts fell to very low levels in the last survey, the number of new units starting has rebounded and increased by 50 per cent over the last six months."

Activity has primarily centred around Tower Hamlets, which accounted for 23 per cent of new starts. This has been driven by early stage work at Galliard's Lincoln Plaza and developments from housing associations to the east of the city. However, there are eight boroughs in London that have seen no activity at all.

"We have seen a noticeable shift in construction activity to the inner boroughs at the expense of the outer boroughs," Mr Duggan explained to the news provider. "Of the top ten most active boroughs, only two are in outer London, whilst central London now accounts for 34 per cent of residential construction in London compared to just 20 per cent 18 months ago."

This shows that despite space constraints, developers are eager to capitalise on central London demand, which is also being fuelled by European and Far Eastern investors. Flats are still proving to be the most popular units, but people are increasingly demanding larger properties. Two and three-bed flats now comprise 68 per cent of units.

Nevertheless, Mr Duggan illustrated that this increase in uptake is not akin to a dangerous boom, with projected completions over the next two years likely to fall short of the accepted 30,000-plus units required each year.

15 January 2013

Tags

London Residential Property Construction,London Property Demand