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…of London grow lonely. Social media, TV, radio and print news is increasingly questioning the ability of London to maintain the current property conditions, which have evolved over the recent years, and even months.
Various factors, working together, have created a ‘boom’, but one that is seeing ever more people priced out of the residential property market. Radio 4 this week broadcast a satirical docu-fiction about the ‘Republic of London’ set in the future, and the woes of the city that went it alone, breaking away from the rest of the UK. However, the fiction is not always so far from the truth. Areas of London are so overpopulated with apartments owned by overseas buyers that they are underpopulated by actual people, reducing the sense of community and limiting the opportunities of businesses, particularly the service sector, who might wish to set up in the area.
The pattern of empty, second-home properties is one that in the past has been more associated with popular rural or seaside areas rather than the city of London, whose identity has never been less than bustling.
Attempts and initiatives aimed at halting the empty-home syndrome in the capital include a tax on companies that own empty properties (15% on residential properties valued at more than £500,000) and an agreement between house-builders not to sell off-plan newbuild properties to foreign investors before UK residents. Some London boroughs have now also abolished any second-home council tax that may have been applied in the past.
Savills estimates that as many as 85% of new homes in London’s prime areas are not used as the owner’s primary residence, indicating that these properties may be empty for a good proportion of the year.
Stories are emerging that even doctors cannot afford to buy property in many parts of London, meaning there is little chance for the families earning less than £50,000 a year, who make up 57% of the demand for homes in the capital.
Part of the problem is the ever-increasing divide between the value of residential property and commercial/office space: the former can be worth up to four times the value of the latter. Without close monitoring, the residential market could outstrip the office market, leaving the peculiar situation of a capital city with nowhere to accommodate its workers.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.