The strengthening of the UK economy pushes the price of rent of elite real estate

The strengthening UK Economy and more sustainable employment market has led to a critical demand for luxury housing in London in the first half of 2014.

Prices for Prime Central London rose by an average 2.9% in the first half of 2014 compared with a fall of 1.9% in 2013. These are the latest market research of elite residential real estate, published by Savills.

On the background of the lack of available for the sale of real estate, the return to the market of families has meant that the rental prices of houses rose by 3.4%, and prices of rental apartments rose by 0.9%.

The tenants of elite housing in London from abroad began to push tenants from the UK. In 2013 and early 2014 foreign tenants was 75% in the market among which most were Western Europeans. For nearly all tenants of the main areas of employment are financial and insurance services, which accounted for about half of the demand in the market. However, there is evidence that the tenant profile becomes wider and less dependent on financial sectors. The proportion of tenants working in the financial and insurance sectors decreased from 55% in 2011. up to 47% this year.

Figures from the employment market indicate that the strongly growing market of media, communication and connection that will surely affect the market of the real estate market in the future.

Luxury real estate outside Central London in such popular areas as Islington, Clapham and Wimbledon was at the peak of popularity this summer, having experienced increased demand for family houses.

Luxury real estate in North-West London, in areas such as Hampstead, or St. Johns wood rose in price on the rent by 2.2% amid competition for tenants and the lack of sufficient number of proposals.

Rising rents for luxury properties in South-West London due to increased demand for a family home with five bedrooms was 1.6% for the quarter. Serious pressure on the market in the sector of small apartments, the increases in prices for one bedroom apartments was 2.2 per cent.

The biggest growth of prices for elite residential properties fixed in the South-East London, in districts CanaryWharf and Wapping is 3.1% . These areas continue to be popular with the employees of the corporate sector, students and employees of the financial markets. A feature of these areas is that here the cost of renting 1 sq ft of housing per year is £25 pounds, and in Central and West London areas – £40. Therefore, the demand for rental in these areas continues to grow.

A huge role in family migration in the UK is the availability of schools. Many families moved from London to the suburbs – cities such as Windsor and Guildford, which are famous for their good schools. In addition, people are attracted to the price difference for rent between London and its nearest suburbs.

® Maxim Savitsky 04. 08.2014 G.

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