In a statement that may surprise those outside of London who had yet to see a decline in the property market, property professionals believe the UK market is bottoming out, boosted by a rise in international demand.
David Adams, a Director of Humberts’ new Mayfair office, has called the bottom of the market and says it is already experiencing a notable increase in demand from Europe, reports OPPToday.
“With the Brexit shake up and the uncertainty surrounding the French Presidential elections in particular owning property in Central London makes good sense. We’re expecting at least a 25% increase in demand from overseas buyers as the year progresses and the dust settles.”
Hugh Wade-Jones, Managing Director at Enness Private Clients, called the end of the market last year. “At the end of 2016, we predicted 2017 would see the bottom of the market, so it’s no surprise to see data from property experts reflecting this.”
It has also seen a significant rise in international buyers. “We have absolutely seen a shift in property investment activity from our high net worth clients; we’re doing fewer residential deals above the £2million mark, but many more in the commercial and international space.
Our commercial enquiries have increased over 60% in the six months to April, highlighting an increased demand for financing in this area. Our international enquiries have also experienced a spike in the last six months, with a huge increase of 400%.
Foreign nationals who are wary of the prime London market are investing in commercial units in the City, for example, or releasing equity from residential property to invest overseas. They no longer want to have all their eggs in one basket and our data is representative of this.”
At the same time, property developers predict upswing in PDR-enabled office to residential conversions with limited impact on the housing shortage.
Three quarters (74%) of property developers expect to see an increase in the number of conversions of under-used office buildings into new homes over the next two years as a result of the government’s decision to extend property development rights (PDR) legislation.
Of these, nearly a third (30%) of developers expects to see a significant growth in PDR-related conversion schemes. This is according to a new study commissioned by Amicus Property Finance, the specialist short term property lender.
More than two thirds (69%) of property developers welcome the PDR extension, which was designed to enable thousands of new homes to be built by making use of neglected industrial and office property while preserving the green belt.
In the UK between July 2015 and June 2016, a total of 1,066 office to residential development applications were permitted with prior approval not required and a further 1,480 applications granted with prior approval.
Despite the predicted growth in PDR-enabled conversions, only 4% of property developers believe this will have a major impact in addressing the UK’s housing shortage with the overwhelming majority (86%) thinking it will help only slightly towards narrowing the gap.
Property developers are also sceptical of the government’s target to build one million homes by 2020 with only one in five (21%) believing this target to be realistic.