2017 was an exciting year for several reasons, and the UK’s property market wasn’t immune to the buzz. While many in my sector might be hoping for a slightly quieter one this year, I think 2018 will be another dynamic period, with decisive shifts in favour of several trends.
Here are my top 5 predictions:
Last year’s Prime London market saw buyers who were really on the hunt for the best possible product, this tendency will only strengthen in 2018. Whether looking for a pied-a-terre or a seven-storey townhouse, buyers will want a property that is unique and designed to meticulous standards. The real winner in this scenario will be dazzling turnkey properties and marketing suites with bespoke finishes.
London’s high-end purchasers will also want to be sold a lifestyle, rather than just a unit. So expect developers to be creative in offering buyers items or additions which help them visualise living in that development: for instance, a free fast car to complement the feel of a modern townhouse.
A few years ago, location mattered to buyers – especially international ones – for reasons of prestige.
Was it Knightsbridge, Mayfair or Kensington & Chelsea?
If the answer was no, persuading high-end buyers of area’s value could be incredibly difficult. Not anymore. The buyers of 2018 are far more pragmatic and willing to look a little further afield to other parts of Central London.
But it’s not just that these “newer” parts of Central London will be runner-up prizes for buyers who couldn’t afford Eaton Square. These postcodes come with their own advantages that areas like Chelsea do not necessarily possess – namely, accessibility.
As work-life balance becomes ever more important and rail fares continue to outstrip real earnings, the savvy buyer of 2018 will opt for locations near their place of work or study.
This could mean a real renaissance for areas such as Holborn, with buyers working in the neighbourhood’s various legal, accountancy and consultancy firms seek the fabled five minute commute. A great example of this is the Pinks Mews development. Located just off Chancery Lane and surrounded by MacFarlanes, Deloitte and company; the development is proving popular with time-poor professionals looking for a convenient place to hang their hat.
2016-7 saw the completion of one of Central London’s most ambitious regeneration projects. Taking several years and worth around £1 billion, the transformation of Victoria was simply incredible.
A somewhat faded conduit between the West End and Westminster is now one of London’s most exciting destinations, with new bars, restaurants and shops clustered round the new 800,000 sq. ft. Nova scheme.
In 2018, regeneration will move towards areas like Tottenham Court, where the £350 million Centre Point Piazza development will play host to a cultural centre, bars, restaurants and high-end retailers set to rival Trafalgar Square and Covent Garden.
All of which will, of course, impact on land values: research from CBRE shows that regeneration of public-private spaces can significantly increase land values – sometimes by more than 100% – as people gain more use and enjoyment from the area.
The capital’s rental market has remained consistently strong over the past few years and it shows no sign of abating in 2018. With London currently experiencing an influx of short-term residents, from overseas students to seconded professionals from abroad, there is plenty of demand for high-quality rental accommodation. Developers would be mad to miss out on this potential long-term income stream. Expect, therefore, increasing numbers of units to be let, rather than sold, in 2018.
Also keep an eye on an increasing pattern of investors buying in Prime London not just to accrue capital, but to build rental income too. Again, Holborn is a great example of this. Not only does its location make it close to big firms and Chancery Lane tube, it’s also a stone’s throw from the London School of Economics and the University of the Arts, meaning a hard-nosed 2018 buyer could snap up a property in the area and rent it out to an overseas student. Let’s just hope they stay in their courses past 2019 to give this pacey market a bit of continuity!
Jamie Gunning is an Executive Director at CBRE Boutique Residential.