A queue for apartments formed in London
London real estate experts report queues for buying relatively affordable housing in the British capital. According to them, people not only stand in line but are willing to spend nights in tents near offices, waiting for sales to start.
“People take their place in line in advance, sleep in tents, so that by the time sales open they are in the front rows and can buy the desired apartments at the starting price,” representatives of the London office of international real estate agency Evans told Gazeta.Ru.
Experts note that the greatest excitement is caused by housing in new buildings priced at £250,000–400,000. Demand in this segment far exceeds supply, and prices for such apartments continue to rise. According to the country's largest real estate portal, Rightmove, the average cost of housing in London exceeded £550,000 as early as August.
Buyers sometimes take their place in line a day before sales begin. Apartments are sold on a first-come, first-served basis, with queues that can number up to 300 people.
Such apartments attract, of course, by their relatively low price, but not only. Typically, these apartments are handed over in a condition fully ready for living or renting – with built-in wardrobes, household appliances, kitchen furniture. Moreover, by buying and subsequently selling an apartment in a building under construction in London, one can earn up to 15–25% of its original value.
According to experts, developers, seeing increased demand for apartments, have begun selling no more than one property per person. Inessa Falina, head of the real estate department at Oracle Capital Group, confirms the heightened interest in new properties. According to her, the waiting list numbers several thousand active buyers, and interest in new buildings is constantly growing.
Analysts cite political instability in the world as one of the main reasons for the huge demand. “The summer of 2014 was very turbulent around the world, and as practice shows, during instability in any region, the number of investors in London real estate from countries in that area grows rapidly,” explains Inessa Falina.
In April, Gazeta.Ru reported that against the backdrop of the political crisis, investors from Russia and Ukraine began buying up real estate in the British capital. At one point, Ukrainians even overtook Russians, becoming the most active buyers of London real estate among expats from CIS countries.
High demand is observed for quality liquid assets with good locations in a budget of up to £1.5 million, which do not appear on the market very often, adds Marina Kuzmina, project manager at the international consulting company Knight Frank's foreign real estate department. “Such projects rarely come to market due to the small number of development sites and lengthy approval procedures that London developers face. Therefore, today the launch of sales in such projects is often accompanied by queues,” she says. According to the expert's forecast, this situation will persist in the market for at least another seven to ten years.
According to Oracle, the most active foreign buyers of London real estate are Italians: their market share reached 6.7%. They are followed by the French, Irish, Greeks, and Spaniards. The Chinese are also active in the London market, buying expensive housing for investment purposes. Experts note that the share of foreign investors in the Central London market this year was 40%.
The London real estate market is characterized by segmentation by area: prices in East London are only just rising, and it is there that apartments are sold on a first-come, first-served basis. Such areas currently include Greenwich, Stratford, and the part of the north bank of the Thames that stretches from Canary Wharf to City Airport, Evans reports.
The historic center has shown high growth over the past two to three years, but now in prestigious areas such as Chelsea and Belgravia, sellers are willing to offer discounts of up to 10%. Although a year ago such a situation was impossible: for the last few years, real estate in London has been steadily rising in price.
According to Rightmove, average prices in London are 30% higher than the pre-crisis peak of 2007. Housing in the British capital rose in price throughout the year and fell for the first time in June – by 0.5%. The gradual decline in prices is caused by a small outflow of foreign investors dissatisfied with tax increases and the strengthening of the pound.
Ekaterina SAKHAROVA.
Gazeta.ru