LONDON (JULY 30): Commercial property and real estate services adviser CBRE expects Central London residential sector activity to increase in the second half of the year.
In its report, Central London Property Market Review Q2 2015, it says this assumes a recovering economy and a more stable political environment.
According to CBRE chairman of residential property, Mark Collins, average residential sales values in Central London fell slightly by 0.1%, to £916,316 in the three months to May this year.
He attributes this drop to "pre-election jitters compounding a natural seasonal slowdown... since the start of the year."
Collins says that with the new Conservative government in power, "a level of uncertainty has been erased from the market, especially in regards to mansion tax”.
He adds that market cooling is to be welcomed and expects more sustainable level of growth in future.
“We think the market has reached a plateau; now that the political environment is secure and as we move into the summer period, we expect activity to increase.”
CBRE managing director of Central London Adam J Hetherington believes overall Central London property markets are showing signs of strong growth despite a number of remaining concerns, such as the forthcoming referendum on the UK’s position in Europe.
"However, perhaps the most prominent risk at the beginning of 2Q was the Greek debt situation, although by quarter end, a third resolution had been reached,” says Hetherington.
He adds that despite concerns about the impact of the Greek debt crisis, the UK economy grew 0.7% in 2Q15 and is expected to be expand by 3.3% per annum over the next five years.
CBRE attributes higher office leasing activity of Central London in 2Q15 to an improving economy. Central London office take-up increased 28%, to four million sq ft at mid-year, the highest total recorded since 2007.
Availability of office space in Central London fell 4% to its lowest level in 14 years, to 9.9 million sq ft.
“This situation is encouraging more occupiers to come to market earlier, ahead of lease events, and is maintaining upward pressure on rents,” Hetherington says.
Hetherington says overseas money "continues to drive activity in the investment market". CBRE puts investment turnover at £8.2 billion as at mid-year, which it says is the highest recorded in eight years.
Central London residential property activity expected to rise, says CBRE
Rachel Chew July 30, 2015 | Updated 6 years ago