Are new build flats in London proving positive for the whole property sector?

Are new build flats in London proving positive for the whole property sector?

New build properties are having a positive effect on the property market as a whole in London, according to a new study, which said that the popularity of newer apartment buildings had meant that prime central London houses are now better value for money.

In the past few years, no properties in the UK have seen quicker acceleration in value than the larger million-pound plus homes in the centre of the capital, but this is starting to ease off, which will be good news for those looking to get their hands on this type of property.

So why is this the case? According to Black Brick, a capital developer, it's a direct result of there now being more people looking to purchase new builds, which are increasingly becoming subject of very high levels of demand. 

One of the main reasons behind this rising demand is the case that there are now more and more people looking to invest in UK property from overseas, and many see London as something of a safe haven for their investment, knowing they will make great returns in the future.

In the likes of Hong Kong, China and other places in the Far East, the economy has really picked up in the last few years, which has left people with money to spend. But with property prices back home rising so quickly, they are increasingly looking for investments overseas.

The bonus for the London property market is that new builds popping up all the time in the capital are perfectly meeting the needs of these Asian buyers.

Just like major Australian cities before it - where Chinese investors snap up 19 per cent of all new builds - London has a swathe of newer properties and a captive foreign target audience waiting to buy and let the properties out for a favourable yield in excess of six per cent.

Newer apartment blocks offer something of a status symbol, while things like a concierge service and the fact there are many people looking to rent in London at the moment - young professionals increasingly look for rental homes as the business sentiment in the capital picks up - means that the chance of good returns is rising all the time.

And while this is great news for developers at the moment, the knock-on effect for the rest of the property market is also being seen as a real bonus.

Black Brick said that in some areas, new build properties are so popular that they are going for around an average of £3,800 per square foot, while existing prime homes have fallen in value thanks to the demand for the newer alternatives, meaning they can now be bought for £1,900 per square foot - great news for buyers.

"Good value is hard to understand let alone find in prime central London property, but we believe there is a growing opportunity for potential buyers to purchase in some of the capital’s freehold houses, a number of which have been left significantly behind in price terms when compared to flats," said managing partner Camilla Dell.

So it seems like London may just be in for yet more positivity towards the end of the year, which can only be good news for buyers, sellers and investors alike.