As the number of new high-end luxury properties in London‘s prime and popular fringe districts such as Central London, Nine Elms and Earls Court climb, developers are feeling the pressure of a slump in demand and international investments.
Developers are finding that they now have to pursue overseas buyers more actively than before. They are also looking outside for cheaper development loans as there has been a 13 per cent fall in international buyers last year, and sales have fallen 19 per cent. Funding for some developments may be running into trouble and developers are looking at offering discounts for bulk purchases in order to secure monies for the construction process.
Higher property taxes have dulled some of the shine of high-end London apartments and land values have fell 1.1 per cent by the last quarter of 2015, compared to a 6.4 per cent gain in the earlier part of the year. What will this year hold for the industry? Property analysts are hoping developers find the funds they need to finance more extensive fringe projects. There are however doubts about whether bulk buyers willing to take up more than 100 units will be easy to find as most of these newer projects are not designed for the rental market.