Plans to build luxury homes in London have increased to the point where it will be difficult for some developers find builders for their projects, said the consultancy EC Harris LLP.
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Developers plan to build in the city more than 25,000 luxury properties worth more than 60,000 million pounds (US $ 96,000 million) over the next decade, compared with a portfolio of 20,000 homes last year, said EC Harris in a report .
That is expected to lead to a shortage of qualified, in a market where construction costs will increase to 8% this year workers, the company said.
Developers of luxury homes are aware that “some projects may be viable in terms of quality and program unless they reach the front of the queue to ensure adequate resources,” said Mark Farmer, head of residential equipment from EC Harris in the report.
About half of the luxury homes planned for the next 10 years will take place in the district of Chelsea and Fulham and the South Bank area, which extends from Battersea to Tower Bridge, EC Harris said. In August, the first class residential properties in the central districts of London including Chelsea, rose 7.7% from a year earlier, the smallest gain in four months, according to data compiled by Knight Frank LLP.
The values ??around the London housing market will fall by 2.6% next year, the first decline since 2009, said yesterday the Centre for Economics and Business Research.
EC Harris, based in London, luxury homes defined as those that will be sold for 1350 pounds per square foot or more. That exceeds 1250 pounds last year.
“As capital values ??have increased, the ability to increase rent levels in parallel reach its maximum rental affordability driven by the domestic market,” Farmer wrote. “As questions remain about the sustainability of recent levels of inflation in the value of sales, the fragility of this market takes aim”. Still, a cooling of the Chinese property market can attract more Asian buyers and developers to London, Farmer said.
There is growing interest from developers in building houses costing 500 pounds per square foot to 1,000 pounds per square foot, particularly those near the Crossrail line linking Heathrow with Canary Wharf said EC Harris.