While we reported in our last segment that there is firm evidence that British consumers have returned to their old shopping habits, we can’t help but wonder how the property market has been impacted since the downturn in the market.
Earlier this week we met with a few contacts who like us, are always seeking out new opportunities within the property market while making every effort to stay true to themselves. They noted that student housing market throughout the United Kingdom is booming, and upon further review it makes perfect sense.
Universities are clustered in particular areas and a large majority offer basic student accommodations. Lending rates much like in the US are very low, but a small time investor can pick one or in some cases a few houses for under £100,000. In areas like Liverpool or Nottingham where universities have thrived, student populations have swelled, naturally increasing the demand for student housing. As a result, rental rates remain strong and therefore a solid investment for investors exists. A niche market has emerged for a higher standard of student housing whereby students, or their parents, are willing to pay a bit more for a flat that is neat and clean and includes a few extras such as new carpets and shiny appliances. Nevertheless, basic housing accommodations can be a viable option for those looking to diversify their asset base especially as the fuel for higher education is somehow always tied to pizza and take- aways rooted in university towns.
Outside of the student accommodation options, few developers were active throughout the dire recession. Yet those who have been successful came to market with “no frills” new build property options, where pretty extras like tiled floors and granite work surfaces are left to the purchaser to install after they move in. Price has been the driving factor in making deals; prompting buyers to move and investors to open their wallets. A good example is The Academia development in Turnford, near Waltham Abbey in Hertfordshire. This thriving new community has excellent transport links into Central London and is close proximity to several primary schools. Here 2 bedroom flats may be purchased for £190,000 and three bedroom townhomes for £270,000.
On the flip side, in Central London there is a true demand for high end residential developments complete with every luxury imaginable. At present a small scheme exists on in the heart of Westminster. 35 Great Peter Street offers only nine luxury apartments including a deluxe penthouse set within an exquisite historic building at the edge of the Smith Square conservation area. Residences may be purchased via consultation by contacting Montague Evans.
And just as we are going to press, Westminster Council has (finally) approved the multi-million pound redevelopment of Chelsea Barracks. This project was held up for over two years as the Prince of Whales intervened. As such the plans will now be referred to the Mayor of London, Boris Johnson for approval before outlined designs are submitted. This 13-acre site on the edge of The Royal Hospital will provide 448 houses and flats, a sports centre, shops and a health care facility. The master plan has received wide spread support from local residents, community officials and businesses.
From student housing accommodations, to small and large residential schemes, the British public and foreign investors are a bit spoiled for choice. With so much commotion we look forward to reviewing the up and coming new build schemes that will ride on the coattails of the 2012 Olympics in London .. and how the market will react!