London’s property prices continue to be squeezed

In London, demand is tightest. Permitted development rights for office to residential conversions are providing a rich seam of income for developers and a welcome revitalisation of many urban sites, but there’s no question that they’re further tightening an already-constrained commercial market. According to Property Week, in the most prime areas of the West End rents are being “smashed”, with a letting at £185 per sq ft at Green Property’s 8 St James’s Square, while even in more peripheral central markets such as King’s Cross rents have crept up to £80 per sq ft. And despite the increase in supply of new homes under these changes, the residential picture is similar. Looking west along the Thames from Canary Wharf, development levels are at an all-time high and longer term, large scale developments, such as the Earls Court regeneration and proposed Cargiant site in West London, should make some inroads. But London now has 58 tube stations around which average house prices are now £1 million or more and the average price of renting a flat or a house in London now hits £1,500 a month. A foot on the property ladder is not a realistic expectation for today’s younger generations and the next Mayor of London – whoever it might be – and others face a major challenge here.