Can the new build market sustain itself in north London?
- Credit: David Butler
Supply is finally meeting demand with new homes are springing up all over north London, but who’s buying, and will turbulent political waters sink the market?
New homes are on the rise throughout north London. Bookend buyers, those either buying for the first time or downsizing, are demanding more new build properties, and developers are listening.
That said, they do seem to be afflicted with selective hearing, largely paying attention to those voices at the top end of the scale. The lowest asking price of new builds in the borough sits at a largely unaffordable £510,000 for those on average incomes.
The greatest population increase to come is set to be of those aged 45 and over, whilst the numbers of those aged 75 years and over are expected to increase by 30 per cent. Those with a few more years under their belt will have more cash to spend, so it’s no wonder that the new builds are a range of golden oldie developments, hip hideouts and plush apartments, with just a spattering of first time buy properties for generation rent.
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So there’s demand, but there’s also a lot of supply as developers rush to cash in.During the first quarter of 2017, 5,500 units were sold in London, 20 per cent off peak levels recorded in 2015 but up on 2016. In the first four months of 2017, 6,200 units were started on site, with 59,000 units under construction. There are now 1,100 completed units in London, compared to just 140 in 2014. However, figures from Molior suggest that the market is standing up to pressure.
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Despite increases in stamp duty on second homes, which has seen rising numbers of landlords laying off buy to let properties, new developments continue to get the green light. In December, supermarket chain Morrisons announced its plan to collaborate with Barratt Homes to redevelop its Camden store including 700 new homes, flats and public facilities built above the shop off Chalk Farm Road.
An empty feeling
Since 2015, 13,500 more units have begun construction than have sold. Since 2014, construction starts have exceeded sales by 13,500 units, with 43 per cent of units currently being built unsold. The Molior predict that it will take a year to sell those properties currently unsold.
Affordable for whom?
In December, the London Central Portfolio reported that stamp duty increases had motivated a fall in sales on super prime new build properties priced above £5 million, causing some agents to cut their prices.
According to Molior, prices have increased 70 per cent since 2009. Within the band of £600 and £999 per sq ft, annualised sales have dropped by 25 per cent since 2015, whilst the number of unsold units has risen by 20 per cent.
We’re still going to need even more homes, with Camden’s population alone estimated to increase 8.5 per cent by 2023, according to 2011 census data.
Camden Council’s 15 year Community Investment Programme pledges to build 3,050 new homes by 2025, 46 per cent of which are promised as affordable. With only 277 having been completed as of October, it seems pace is slow and only time will tell whether the project will fall into the trap of regeneration schemes that effectively price out locals.
For those with the means to buy however there’s never been a better time to bag yourself a new build in north London, and there’s something for every conceivable taste on offer.
See our new homes directory for everything that’s going up in north London in the near future.