Since the uplift in stamp duty in 2016 and the uncertainty surrounding the result of the EU referendum, central London property has suffered from low transaction levels and a fall in value.
Does this mean that developers are leaving London in their droves? No, but other areas have become much more appealing as a result.
London-based developers are now focusing increasingly on affordable outer boroughs of London, rather than the central areas they may have previously gravitated towards. From a funding perspective, we are seeing a real shift towards areas that would have historically been considered less fashionable.
Boroughs such as Newham and Hounslow are examples of affordable areas being targeted by developers. There is still a fundamental disparity between supply and demand for housing in London, so developers are not running for the hills just yet. However, the days of central London as a safe haven for the wealthy to park their money are behind us.
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Another area which has attracted attention from developers and funders alike is the commuter belt. Improvements in rail and road infrastructure have meant that areas within an hour’s travel of central London have become increasingly attractive as developers stand to benefit from both lower land values and the government-backed Help to Buy initiative.
While London has endured a turbulent couple of years, areas outside of the capital have been thriving. Bristol is now incredibly popular and has seen strong growth in recent years. Situated only an hour and a half by train from both Birmingham and London, and boasting a very strong employment market, it is easy to see why Bristol has become a property hotspot.
The UK’s second city, Birmingham, has also seen an increase in development recently. A sustained period of regeneration sparked by HS2 has given the city a real boost. It’s a similar story for Manchester, where the relocation of blue-chip companies, such as the BBC, has driven a strong demand for residential property.
In short, London might not have lost its shine, but there are other opportunities out there now. The capital is not the holy grail it used to be.