Potential investors with an eye on the London property market may benefit from present market conditions which have led to a supply-and-demand imbalance, according to industry insiders.
The recent financial turmoil has altered the landscape of the London property market, which has seen a significant drop in developer activity.
Constrained access to finances has resulted in a fall in the number of new private residential developments reaching completion and on the start of new developments. The number of projects expected to be completed this year is about 60,000, half the number of last year's completions. Private residential starts in the last quarter of last year dropped to less than a third of the quarterly average of the previous year, according to property consultancy and research specialist Molior.
Indications are that there could be a shortfall in the number of quality homes available for rent, especially with a growing population in London which is expected to increase by 5 per cent annually over the next six years.
James Talbot, a partner at property agency King Sturge, said market conditions were attractive for potential investors, particularly for off-plan developments. 'With a lack of liquidity in the mortgage market restricting transactions of completed properties, developers struggling to raise capital thus placing new constructions on hold, and many market commentators predicting that we are close to the bottom of the cycle, savvy buyers would do well to buy property that will not be completed for three years on attractive payment terms.'
He said that with newbuild starts at an all-time low and demand set to rise once mortgage lending picked up, demand would far outstrip supply. 'Also factor in that many interest rates are low, so with deposit accounts not earning money and stock markets falling, now could be a time to re-enter the market.'
