LONDON, (Reuters) – Developers rushing to build top-quality London homes to cash in on strong overseas demand are in danger of being stung by a price crash as they flood the market, property consultancy EC Harris said.
Over 15,000 homes in developments worth more than 38 billion pounds ($60 billion) are due for completion in London’s most expensive neighbourhoods in the next ten years, a 70 percent jump on last year, an EC Harris report said yesterday.
The total floor area covers almost 20 million square feet – equivalent to the size of the London Olympic park – and includes properties in upmarket Mayfair, the City of London financial district and the south bank of the river Thames.
“Developers are racing to get first to site because they don’t want to miss out on the boom that’s happening,” said Mark Farmer, head of residential at EC Harris. “There is a danger that if all these schemes happen that you’ll have a massive oversupply.”
Prices for luxury homes have surged in recent years after economic turmoil in Europe and political uprisings across North Africa drove investors to the relative safety of central London property. Signs of a slowdown appeared after the UK government said in March it would clamp down on tax avoidance by overseas buyers of homes costing more than 2 million pounds.
Prices for the best central London homes rose 1.8 percent in the three months to August, the weakest quarterly growth since November 2010, property consultant Knight Frank said yesterday.
