LONDON HOTSPOTS RESIDENTIAL RESEARCH - RESIDENTIAL DEVELOPMENT OPPORTUNITY AREAS 2015 - Knight Frank

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LONDON HOTSPOTS RESIDENTIAL RESEARCH - RESIDENTIAL DEVELOPMENT OPPORTUNITY AREAS 2015 - Knight Frank
RESIDENTIAL RESEARCH

LONDON
HOTSPOTS
RESIDENTIAL DEVELOPMENT
OPPORTUNITY AREAS 2015

HOUSING DELIVERY   IMPROVING TRANSPORT   MARKET FORECASTS
ACROSS LONDON      INFRASTRUCTURE
INTRODUCTION                                           FIGURE 1
                                                       London’s future residential development ‘hotspots’
In 2011, Knight Frank published
its inaugural Development
Hotspots report. Our analysis
highlighted areas where
                                                                         2015 hotspots
market fundamentals, from
regeneration to transport links,
suggested new-build property
prices had the propensity to
outperform the market.
                                                                                                                                                        9
Of the 13 areas we highlighted, most
have performed in line with, or even
beyond, our forecasts for achievable                                              2
new-build prices, as examined in detail
later in the report.
                                                                   1
Following a comprehensive review, we
have returned to our hotspots forecast
to reflect our expectations of how                                                                                    4                        7
different locations are projected to
perform relative to the overall market in
the years to come. We expect some of
the original locations will now perform
in line with the market. We have also
added some new locations where we                                                                                                                   6
expect to see outperformance.
                                                                                                              3
It is worth noting that the prices we are
examining are quite distinct from our
wider market forecasts, which include all                                                                                                               5
types of housing. Instead we are looking
at very localised areas, comparing
current day values for a typical new-
build apartment or house to the prices
that may be reached by the end of 2018.
                                                          Source: Knight Frank Residential Research
After some years of strong performance,
price growth is showing signs of
easing. This fits with the cyclical nature             alongside the views of our residential         and labour costs have also spiralled. Yet
of the market, as well as specific                     development consultancy teams, are             at the same time, the Mayor of London
factors currently at play. However the                 not traditional ‘prime’ areas and this         is making more firm commitments to
disequilibrium between supply and                      will be reflected in capital values, but       step up housing supply in the Capital,
demand shows little sign of being                      they are included as the factors               potentially cutting red tape and freeing up
addressed, and this, coupled with                      mentioned suggest they will outperform         more government and brownfield land.
London’s standing as a leading global                  the wider market.
                                                                                                      We are not underestimating the risks
city will continue to underpin the market.
                                                       By the end of 2018, Crossrail will be          to the property market posed by the
It is noticeable that we have widened                  open, dramatically cutting travel times        upcoming election and wider economic
our scope for development hotspots                     across the capital, and making some of         and geopolitical landscape. We publish
beyond prime central London, which                     our new hotspots even more attractive.         our latest thinking on these in our
was the focus of the 2011 report. This                 We have examined the effect of Crossrail       quarterly forecast and risk monitor, and
not only reflects the “ripple-out” effect              on property movements in detail in our         recognise that any dramatic changes
of prices from central London, which                   recent Crossrail Report.                       in the current market conditions could
we expect to continue in the short-term,                                                              impact pricing. However our analysis
but also highlights some of the large-                 The outlook for developers is not the          shows that at the current time, the areas
scale placemaking which is already                     same as it was in 2011. Since then,            identified in this report are poised to
underway or which is planned. Some of                  development land values in prime central       deliver growth that outperforms the
our hotspots, identified by our analysis               London have risen by 48%, and material         wider market.
Published on a non-reliance basis; please see the important note on back cover.

2
13        HOTSPOTS 2015                      RESIDENTIAL RESEARCH

                                       11                         12                                   13

     8

               10

                                                                    14
ts                                                                                               16

                                                                                     15                       11                                    12
                                                                                                                                 17

                                                            9        8

                                                                                          10

                        4                        7                                                                                                       14

                                                                                                      HOTSPOTS
         Methodology:
                                                                                                      Listed in order from West London to East London.
                                                                                                      Hotspots not ranked in order of forecast growth.

         In our analysis we have had regard               6
                                                     developers   to enter the market and             1       Acton
         for demographic and economic                undertake significant schemes over               2       Old Oak Common
                 3 – but the critical elements
         forecasts                                   the next five years.                             3       Earls Court
         in our assessment have been the                                                              4       Bayswater
         factors which are likely to lead to
                                                     Working with our London Residential              5       Nine Elms
                                                             5
                                                     Development   team we have                       6       Victoria
         the dynamics of a particular market
         area changing over time. So we              determined a final short-list of                 7       Mayfair
                                                     ‘hotspots’ across London where                   8       King’s Cross
         have looked closely at new and
                                                     we believe there is (a) scope for                9       Euston
         proposed transport infrastructure,
                                                     development activity, (b) where the              10      City Fringe
         the spread of gentrification, current
                                                     underlying market is undergoing                  11      Dalston & Hackney
         and potential pricing, and critically
                                                                                                      12      Olympic Park & Stratford
         we have concentrated on areas               improvements due to infrastructure
                                                                                                      13      Tottenham Hale
         where there is a real opportunity,          investment or sociodemographic shifts
                                                                                                      14      Canary Wharf Estate
         either through refurbishment or             and (c) where there is real potential for
                                                                                                      15      Greenwich
         redevelopment, for residential              price growth over the next few years.            16      Royal Docks
                                                                                                      17      Woolwich

                                                                                                                                                              3
Hotspots drivers
                                                                                              Development      Prime London expansion

HOTSPOTS 2015
                                                                                              Regeneration     Price differential
                                                                                              Transport        Place-making

                                                                                                                          * 2011 hotspots

1. Acton                                  3. Earls Court*                                  5. Nine Elms*
Current value: £650 psf                   Current value: £1,500 - £1,600 psf               Current value: £1,100 - £1,400 psf
2018 forecast: £950 psf                   2018 forecast: £2,000+ psf                       2018 forecast: £1,800 psf

                                                                                           Running from Chelsea Bridge to Lambeth
Acton is set to be one of the key         Planning permission for the Earls Court          Bridge via East Battersea, Vauxhall
beneficiary areas of Crossrail. As well   project was granted in 2013. Under the           and Albert Embankment, the scale of
as a dramatic reduction in travel times   proposals, the large-scale regeneration of       regeneration taking place Nine Elms is vast.
which will open this area up to those     the area will create 7,500 homes spread          We originally identified the area as a Hotspot
working in the City and further east, a   across four villages and green spaces.           back in 2011. While price growth has been
new station and improvements to the       Improvements to the public realm,                robust between then and now, we believe
public realm will enhance the area.       including a new high street, are likely to       there is potential for further outperformance
                                          further increase the desirability of the area.   as new schemes come to market and
There are over 1,000 private units
                                                                                           improvements to the public realm are
with planning permission or already       Buyers will also benefit from being
                                                                                           delivered. Our analysis of development
under construction in Acton, but the      within walking distance of three existing
                                                                                           pipelines shows that over the next ten years
potential supply of homes which           underground stations and one overground
                                                                                           over 15,000 homes will be built, alongside
have yet to be granted planning is        station. New-build prices have risen by          new schools and parks. A £1 billion transport
much larger – suggesting a critical       20% since 2011. We now expect that               improvement package includes two new
mass of delivery which could uplift       prices will reach £2,000+ psf in 2018.           Northern Line stations, at Nine Elms and
the whole area.                           The long-term nature of the regeneration         Battersea, creating direct links to the West
                                          taking place in this area – some                 End, City and North London.
                                          developments will not be completed until
                                                                                                 ISSUES: Pricing could be determined
                                          2032 – means that growth is likely to
                                                                                                 by the phasing of delivery of
                                          continue in the medium-term.                           completed units in this large-scale
                                                                                                 regeneration area
2. Old Oak Common
Current value: £600 - £650 psf                                                             6. Victoria*
2018 forecast: £950 - £1,000 psf                                                           Current value: £1,750 psf
                                                                                           2018 forecast: £2,500 - £3,250 psf
                                          4. Bayswater*
                                          Current value: £1,750 - £2,500 psf
Plans to create a “superhub” for                                                           The relative ‘discount’ on offer for new-
                                          2018 forecast: £2,750 psf
both Crossrail and HS2 have the                                                            build housing in this area compared
potential to transform this 2,300                                                          to neighbouring Belgravia will become
acre industrial area in west London                                                        increasingly attractive. Victoria has already
                                          This area on the northern side of Hyde
into one of the Capital’s biggest                                                          seen regeneration and improvement over
                                          Park has lagged behind neighbouring
regeneration projects since the                                                            the last decade, with new retail and office
                                          areas of Notting Hill, Maida Vale and
Olympics. The regeneration includes                                                        space opening in Cardinal Place. There
                                          the Hyde Park Estate in terms of capital
plans to build two new overground                                                          are plans for further enhancements to the
                                          values over the past decade. However
rail stations which, taken as a whole,                                                     realm and amenity offer alongside providing
                                          buyer demand in and around Bayswater is
will be roughly the size of Waterloo                                                       new homes, shops, offices and improved
                                          already rising.                                  transport facilities. The Victoria Station
and expected to handle 250,000
passengers daily. Development plans       Plans to redevelop a large section of            redevelopment will give the area a well-
are being drawn up for retail property    Queensway and upgrade the retail and             needed facelift, and might result in more
and hotels, as well as up to 24,000       amenities on offer will only enhance the         interest from buyers keen to take
new homes.                                appeal of this area which will also be well      advantage of its proximity both to the
                                          served by Crossrail when it opens in 2018.       West End and West London.
      ISSUES: Depends on approval
      of HS2 & Crossrail ‘spur’

4
HOTSPOTS 2015                                      RESIDENTIAL RESEARCH

MAKING NEW CONNECTIONS
Changes in transport infrastructure                    1.26 billion passenger journeys made.                          identifies the proposed new stations
stimulate and open up parts of a city,                 This figure represents 200 million more                        and terminals.
attract investment, create additional                  journeys than in 2009-10. With the                             Approval has already been granted to
demand for housing and can bring                       population of London forecast to pass 10
                                                                                                                      extend the Northern Line to Battersea,
new energy to markets in and around                    million by the 2030s, up from around 8.5
                                                                                                                      with new stations being built at Nine
transport hubs.                                        million now, demand for public transport
                                                                                                                      Elms and Battersea.
Transport links are a key factor in                    will rise exponentially.
                                                                                                                      Proposals have been submitted for a
the property market. We commonly                       As a result, the arrival of Crossrail, a high-
                                                                                                                      new high speed rail link from London
witness price outperformance                           speed line which will increase London’s
                                                                                                                      to the midlands, known as the High
and see new residential hotspots                       rail capacity by 10% is highly anticipated.
emerge as access to an area                            Crossrail will interconnect with 41 other                      Speed 2 (HS2) project. Under the
improves or travel times around                        rail interchanges, including London                            proposals, terminals will be created in
the city are reduced.                                  Underground and Overground services,                           Old Oak Common and Euston, two of
                                                       National Rail, Heathrow Express and the                        our new Hotspots.
Knight Frank’s recent survey of those
renting property in London – the                       DLR, giving people faster, easier journeys                     The preferred route for ‘Crossrail 2’ –
largest of its kind to date – showed                   across the city.                                               the high speed train which will, if it is
that nearly 80% of Londoners said                      Our analysis shows that since the project                      approved, run from South West London
proximity to transport links was a key                 was granted Royal Assent in July 2008,                         to the North East of the city, has also
factor when deciding where to live.                    property prices in the areas surrounding                       been announced. If approved, it is
But existing transport infrastructure                  the stations have outperformed the                             estimated that Crossrail 2 would be
in London is already straining to keep                 wider market.                                                  completed by 2030. There is likely to
up with rising passenger numbers.                      We expect that other large transport                           be burgeoning interest in development
The underground ran more services                      infrastructure projects, if approved, will                     opportunities close to the stations
and carried more customers than                        have the potential to result in similar                        along Crossrail 2, just as there has
ever before in 2013-14, with a record                  price outperformance. The map below                            been along the first Crossrail route.

FIGURE 2
Future transport infrastructure

                                                                             !
                                                                                               ! Tottenham Hale                              Redbridge
           Crossrail
                                                                                          !
           Crossrail 2 (proposed)
           HS2 (proposed)
                                                                                                        Waltham Forest
           Northern Line Extension                                                                                                                           !
                                                                                                                                                         !
                                                                                              Hackney                                            !
                                                                       Isli

 Brent                                                                                                                                   !
                                                                           ng

                                        Camden                                                                                  !
                                                                              to

                                                                                          ! Dalston Junction             !                               Barking
                                                                             n

                                                                                                                      ! Stratford

           Old Oak
                                                                  Euston     !                       Tower
           Common                                                 !                                 Hamlets                         Newham
                                                                              !                 !
                                                                  !                !
       !                        Paddington !            !                                                      Canary
      Acton Mainline                                                                                           Wharf                !
                                                                                                                  !

                                                   Victoria                                                                                          !
                                                              !
                                                                                    Southwark                                                Woolwich
                                               !                              Nine Elms

                                                        Battersea

                                                                                                                                        Greenwich
                                               !

Source: Knight Frank Residential Research

                                                                                                                                                                   5
7. Mayfair                                   8. Euston
                              Current value: £5,500 psf                    Current value: £1,000 psf
                              2018 forecast: £7,000 psf                    2018 forecast: £1,500 psf

    38%
                              Mayfair has consolidated its reputation      As part of the Euston Area Plan, a
                              as a destination for luxury over the last    collaborative effort between Camden
                              decade, boasting the very best London        Council, the Greater London Authority
                              has to offer in terms of retail, hotels      and Transport for London, the area will be
                              and amenities.                               rejuvenated with new homes, businesses,
    Projected growth in       Significant changes in the public
                                                                           schools and local amenities, centred on
    number of households in                                                the redevelopment of the existing rail
                              realm, especially around Mount Street,
                                                                           station. Euston is also likely to benefit
    inner London 2012-2037    have enhanced the appeal of the area         from an overspill from King’s Cross as
    (DCLG)                    among buyers. Another upgrade is             buyer demand filters out. We expect the
                              on the way with the construction of          development trends at King’s Cross will be
                              new ticket halls for Crossrail, which

    10
                                                                           replicated in Euston. Prices average around
                              will open in 2018. The residential           £1,000 per square foot and we forecast this
                              developments under construction              will rise to £1,500 per square foot by 2018.
                              or in the planning pipeline in Mayfair             ISSUES: Pricing could be
                              are now starting to compete in                     determined by timing of delivery

    million
                              terms of luxury, underlining the                   of schemes
                              “super-prime” status of this postcode.
                              These ambitious schemes provide the
                              opportunity for further uplifts in prices.
    London’s forecast               ISSUES: The future “super-
                                                                           9. King’s Cross*
                                                                           Current value: £1,400 - £1,500 psf
                                    prime” market may be
    population, 2030                                                       2018 forecast: £2,000 psf
                                    influenced by Government
                                    policy, especially in respect of
                                    property taxation.                     Prices in King’s Cross have already
                                                                           achieved the upper-end of our earlier
                                                                           forecast in 2011, but the high-quality nature
                                                                           of the developments which are planned

                                 10. City Fringe*                          Farringdon
                                 In our 2011 Hotspots                      Current value: £1,100 - £1,300 psf
                                 Report we identified the                  2018 forecast: £1,600 psf
                                 City & City Fringe as a
                                 hotspot. In this report we                An estimated three million passengers are
                                 examine some areas on                     expected to use Farringdon’s Crossrail
                                 a more localised basis,                   station every month when it opens in 2018
                                 identifying pricing trends                making it one of the biggest transport
                                 for each locality:                        interchanges in the capital. The area has
                                                                           already seen a noticeable increase in buyer
                                                                           activity in recent years due to its proximity
                                                                           to the City and also as a result of widespread
                                                                           regeneration and redevelopment. A range
                                                                           of public realm improvements are planned
                                                                           in the vicinity of the station and our analysis
                                                                           shows that there are over 1,200 residential
                                                                           units under construction or with full
                                                                           planning permission in the area. Farringdon
                                                                           was included in our original 2011 hotspots
                                                                           report – and new-build prices in this area
                                                                           have already reached our 2016 forecast,
                                                                           with more growth anticipated.

6
HOTSPOTS 2015                     RESIDENTIAL RESEARCH

means we see the potential for further         We expect this ongoing regeneration will
growth. There are 265 units already under      have a positive impact on pricing in the
construction and a further 1,700 units with    coming years. The popularity of these
planning approved which will be delivered      areas with families has underpinned prices,
in coming years. Technology giant Google’s     and we see this demand continuing.
plans to open a new head office in King’s            ISSUES: Would benefit from more
Cross in 2016 will further underpin the              transport infrastructure ahead of
status of this area. As one of the main              Crossrail 2                             FIGURE 3
transport hubs for London, with direct links                                                 Projected growth in households in
to many of the UK’s key cities as well as                                                    London, 2015
Paris, and six underground lines, it boasts    12. Olympic Park & Stratford
enviable connectivity within the Capital.
                                               Current value: £700 - £800 psf
                                               2018 forecast: £1,000 - £1,200 psf

                                               Perhaps the main legacy of the 2012

11. Dalston & Hackney
Current value: £700 psf
                                               London Olympics was the regeneration
                                               of the Olympic Park. Thousands of new
                                               homes are currently under construction,
                                               recently completed or in the planning
                                                                                               23,428Inner London
2018 forecast: £1,000 psf
                                               pipeline, transforming a previously
                                               barren part of the city into five new
Situated two and a half miles north of the     neighbourhoods. The area is already

                                                                                                        32,154
City of London, Dalston benefitted from        well served by transport with London
the arrival of the East London Overground      Underground connections, mainline
line in 2010. The overground rail link         rail services and the DLR at Stratford.
connects the area with Canary Wharf,           The arrival of Crossrail in 2018 will add
via Canada Water, and the West End via         to these, further expanding the pool of                          Outer London
Highbury & Islington. The line’s arrival       potential buyers.
came with a new Dalston Junction station
and development in the area. Currently
there are just over 1,000 homes being
                                                                                             Source: DCLG
built and more in the planning pipeline.

Shoreditch                                     Whitechapel                                   FIGURE 4
Current value: £1,200 - £1,300 psf             Current value: £900 - £1,000 psf              Rising land costs
2018 forecast: £1,500 - £1,700 psf             2018 forecast: £1,250 - £1,500 psf            Prime central London residential
                                                                                             development land values
                                                                                             (indexed, 100 = September 2011)

We have isolated Shoreditch from the           The area is set to become a major
Eastern Fringe as we believe that this         transport hub, connecting Crossrail to        150
localised area has the opportunity             the London Overground orbital route
for further growth. Shoreditch has             around London. Crossrail will also mean       140
undergone a marked transformation              that Whitechapel has a direct link to
                                               Heathrow. In terms of development, the        130
over the last two decades and the
area now attracts young professionals          Whitechapel Vision Masterplan will guide
                                                                                             120
from all over the world. This is likely        new development in the area over the
to continue with growing commercial            next 15 years. Focusing on six key
                                                                                             110
interest in the area expected to result        areas the plan will deliver over 3,500
in a significant expansion of the              new homes by 2025, generate 5,000
                                                                                             100
professional workforce. The forecast           jobs, and create seven new public
for household growth in Hackney                squares and open spaces. Our analysis           90
                                               shows there are 550 units currently
                                                                                                     Sep-11
                                                                                                     Dec-11
                                                                                                     Mar-12
                                                                                                     Jun-12
                                                                                                     Sep-12
                                                                                                     Dec-12
                                                                                                      Ma-13
                                                                                                     Jun-13
                                                                                                     Sep-13
                                                                                                     Dec-13
                                                                                                    Maar-14
                                                                                                     Jun-14
                                                                                                     Sep-14
                                                                                                     Dec-14

between 2011 and 2021 is 13% –
or an extra 13,000 households.                 under construction or with planning
                                               permission which will be delivered in
                                               the coming years.                             Source: Knight Frank Residential Research

                                                                                                                                         7
13. Tottenham Hale                                over 13,000 new homes currently under
                                                      Current value: £450 psf                           construction or with planning approved.
                                                      2018 forecast: £750 psf                           Transport options in the area include the
                                                                                                        Jubilee Line with links to Canary Wharf and
                                                                                                        the West End, the Emirates Airline cable car
                                                      With over 30 hectares of development and          link, the DLR and Thames Clipper services
            LONDON                                    investment opportunities, Tottenham Hale          on the river.

            DEVELOPMENT                               has notable potential. The area forms part
                                                      of the Upper Lea Valley regeneration plans
                                                                                                              ISSUES: Amenities, including shops
                                                                                                               and community facilities, need to be
            Boroughs set to deliver the               – a joint initiative between the GLA, TfL and            delivered at start of development
            most housing                              four London boroughs to deliver thousands
            Ranked by residential units in planning   of new homes and jobs. Already transport
            or under construction
                                                      infrastructure is being improved with a
                                                      £110 million investment in a new tube, rail       16. Royal Docks
                                                      and bus station, as well as road network          Current value: £600 - £700 psf
    1. NEWHAM                                                                                           2018 forecast: £900 - £1,000 psf
                                                      improvements and public realm works due
    2. TOWER HAMLETS                                  to complete in 2017. Tottenham Hale is also
                                                      on the preferred route for Crossrail 2, which
                                                                                                        Plans are in place, backed by the Mayor
    3. GREENWICH                                      could serve to increase buyer demand close
                                                                                                        of London and the Mayor of Newham, to
                                                      to the station if final permission is granted.
                                                                                                        turn the Royal Docks into the Capital’s next
    4. BARNET                                               ISSUES: Crossrail 2 not                     “business district”. The regeneration aims
                                                            yet confirmed
    5. WANDSWORTH                                                                                       to create a centre for global trade, with
                                                                                                        thousands of jobs and new homes.
                                                                                                        Already over 6,000 new homes are being
    Source: Knight Frank Residential Research                                                           built or have had planning permission
                                                      14. Canary Wharf Estate                           granted. Population projections by the GLA
                                                      Current value: £1,200 psf                         suggest that in the Royal Docks area there
                                                      2018 forecast: £1,750 psf                         will be a 103% increase in population by
                                                                                                        2028. Work is progressing on Crossrail
                                                                                                        which, when complete, will stop at Custom
                                                      Canary Wharf is already an established            House station in the Royal Docks making
                                                      business and residential district. Despite        the area more accessible and reducing
                                                      the area’s relative maturity in terms of          journey times to and from Heathrow,
                                                      regeneration, there is scope for further          Canary Wharf and the City of London.
                                                      price growth in the new-build sector, led by            ISSUES: Pricing could be determined
                                                      improvements to transport infrastructure                by timing of delivery of schemes
                                                      as well as new residential development.                 and amenities
                                                      Transport will be boosted by the arrival of
                                                      Crossrail which will be the first direct public
                                                      transport link between the West End, the          17. Woolwich
                                                      City and Canary Wharf – London’s three            Current value: £650 psf
                                                      key areas of business and wealth creation.        2018 forecast: £950 psf
                                                      New development will help satisfy demand
                                                      as it spreads eastward from prime
                                                      central London.                                   When the Woolwich Crossrail station opens
                                                                                                        in 2018, about a dozen trains an hour will link
                                                                                                        the area to Canary Wharf and the West End,
                                                                                                        as well as Heathrow. This promise of this
                                                                                                        increased connectivity is already boosting
                                                                                                        demand from buyers. Woolwich Arsenal
                                                                                                        is set to be key to the more established
                                                      15. Greenwich                                     business and residential hub as it emerges in
                                                      Current value: £600 psf
                                                                                                        East London – benefitting from the availability
                                                      2018 forecast: £950 psf
                                                                                                        of land in order to deliver much needed
                                                                                                        homes for London. There are currently nearly
                                                      In time, Greenwich Peninsula is set to            5,000 units under construction or with full
                                                      become a new district for London with             planning permission in Woolwich.
                                                      thousands of homes, offices, schools,
                                                      shops and community facilities. Some of
                                                      this re-generation is already underway, with

8
HOTSPOTS 2015                                RESIDENTIAL RESEARCH

BUILDING UP AND EAST
                                                               is attracting volume. Part of this is the                          The price differential between Central
                                                               sheer scale of available land in the eastern                       London and East London represents
                                                               boroughs. Moving further East also offers                          a relative level of affordability. With a
                                                               the opportunity to maximise on the full-                           focus on volume and the creation of
                                Jo Cosham                      stretch of the Thames and its riverside                            new lifestyle-based communities, this
                                Residential                    locations. The Knight Dragon site on                               type of development appeals to the
                                Research                       Greenwich Peninsula alone has 1.6 miles                            wider mainstream market.
                                                               of waterfront.
                                                                                                                                  Across London, the number of
With the development of Wood                                   The desire to capitalise on volume, as
                                                                                                                                  private unit starts in 2014 was 15%
Wharf on the Canary Wharf Estate,                              well as waterside living, is also illustrated
                                                                                                                                  higher than the previous record year
Greenwich Peninsula and the Royal                              through the increase in taller buildings
                                                                                                                                  in 2013, with 24,693 new homes
Docks, the story in the East is one                            in the pipeline. Currently, in all London
                                                               boroughs, there are 192 buildings of 20                            under construction. Compare this
of single sites with greater unit                                                                                                 to 7,247 unit starts in the post-
numbers, says Jo Cosham.                                       or more storeys, either in application,
                                                               with planning permission, or under                                 Lehman low of 2009, and 17,241 in
Isolating the borough of Greenwich,                            construction. In East London, there are a                          the 2007 peak. The number of units
for example, in 2012 there were 24                             total of 55 tall towers in the pipeline, with                      under construction in 2014 was
schemes with 100 or more units; in                             another 11 awaiting approval, representing                         43% higher than in 2007. Out of all
2013, there were 38 schemes. At the                            34% of the London total. These towers                              the construction activity in 2014,
end of 2014, there were 70. At present,                        range in height from 20 storeys to 75                              the East London boroughs saw the
Greenwich Peninsula has planning                               storeys. In general, tall towers tend to be                        largest number of new starts at 9,849,
approved for over 13,000 units (nearly                         built at the end of schemes, so delivery of                        representing just under 40% of the
9,000 of which are private). The East                          these will be phased.                                              total across London as a whole.

FIGURE 5
Where will housing in London be delivered in the future?
London borough’s housing supply: % of total delivery (as at Q1 2015) of units with full planning permission or under construction

                                                                                                           ENFIELD

                                                                                       BARNET
  10% - 11%                                                       HARROW
                                                                                                      HARINGEY              WALTHAM
                                                  HILLINGDON                                                                 FOREST     REDBRIDGE
                                                                                                                                                             HAVERING
                                                                                                        ISLI

                                                                            BRENT                                  HACKNEY
                                                                                                            NGT

                                                                                               CAMDEN                                          BARKING &
                                                                                                                                               DAGENHAM
                                                                                                           ON

                                                                                                                         TOWER    NEWHAM
                                                                   EALING                        CW               CL    HAMLETS
   5% - 6%
                                                                                           KC
                                                                                                                  SOU

                                                                                          HF                                           GREENWICH
                                                                                                                   THW

                                                               HOUNSLOW
                                                                                                         LAMB

                                                                                                                      ARK

                                                                                                                                                    BEXLEY
                                                                  RICHMOND-UPON- WANDSWORTH
                                                                                                           ETH

                                                                                                                            LEWISHAM
                                                                      THAMES

                                                                            KINGSTON      MERTON
    0% - 1%                                                                  -UPON-
                                                                             THAMES
                                                                                                                                        BROMLEY
                                                                                               SUTTON             CROYDON
 HF Hammersmith & Fulham
 KC Kensington & Chelsea
 CW City of Westminster
 CL City of London
 Source: Knight Frank Residential Research / Molior London

                                                                                                                                                                              9
HOTSPOTS 2011
FIGURE 6
2011 hotspots

             2011 hotspots
             2011 and 2015 hotspots                                                                            24

                                                                                 21
                                                            20                             23
                              22

                                                                                                         18

                           19

                                                                                                HOTSPOTS (2011)
                                                                                                18    Southbank
                                                                                                19    Hammersmith
                                                                                                20    Paddington
                                                                                                21    Marylebone / Fitzrovia
                                                                                                22    White City Westfield
                                                                                                23    Midtown
                                                                                                24    City Road Corridor

Some of the hotspots included in our 2011     Here, we revisit the 2011 Hotspots not      an increase in the number of buyers and
report, have shown strong growth over         yet mentioned in this report, to examine    investors who are no longer as loyal as
the last four years and are still expected    the main drivers of growth in these         they once were to the traditional core
to outperform the wider market between        development markets.                        prime areas of London. Situated between
now and 2018. These include Earls Court,                                                  the major hubs of the West End and the
                                              New-build property prices in Southbank/
Nine Elms, City Fringe, King’s Cross,                                                     City, many view Midtown, which includes
                                              Blackfriars (18) have risen by 40%
Bayswater and Victoria. These areas have                                                  the heart of London’s theatre land as well
                                              since 2011 and are on track to reach
already been examined in this report.                                                     as the London School of Economics and
                                              our forecast of 44% growth earlier than
                                              anticipated, taking average new-build       Kings College, as offering good value, in
Most of the remaining hotspots have                                                       terms of price per square foot, compared
                                              prices to around £1,800 psf. We expect
already achieved the price lifts we                                                       to neighbouring areas.
                                              any future price growth will be in line
forecast in 2011, in some cases over a
                                              with our wider forecast for prime central
shorter time-frame than we anticipated.                                                   As a result of this rising demand, price
                                              London (figure 8).
                                                                                          growth over the last few years has
We expect that these areas will continue
                                              The re-generation of Blackfriars station    been robust and the very best new
to move in line with our forecasts from
                                              has played its part in the growth in        developments are able to achieve prices
2011 (see figure 7), and thereafter perform
                                              pricing, as has rising demand from          above the original forecasts for £2,250
in line with the general market trend, a
                                              buyers for property close to the river.     psf we made in 2011.
reflection of how some of these markets
have matured and stabilised over the last     Located on the opposite bank of the         Marylebone/Fitzrovia (21) has been one
four years.                                   river, Midtown (23) has benefitted from     of the stand-out performers, in terms of

10
HOTSPOTS 2015                       RESIDENTIAL RESEARCH

price growth, from our previous report.               media village and an office complex for
Since 2011, prices for new-build                      blue-chip businesses.
residential schemes have risen by 83%,
with the very best developments achieving
                                                      New-build prices are on track to reach
                                                      our original 2011 forecast before rising
                                                                                                         “Whilst the trend
upwards of £2,750 psf and surpassing our
original forecast. We believe future price
                                                      in line with central London forecasts                for London as a
growth will move in line with our wider
                                                      until 2018. The shopping centre has
                                                      been a big draw for the area and further
                                                                                                           whole remains
London forecasts.
                                                      expansion nearby is likely to appeal                 positive, the more
The area will be within walking distance              to buyers.
                                                                                                           astute will analyse
of both Bond Street and Tottenham Court
Road Crossrail stations, when the service
                                                      New-build residential property prices in             opportunities on a
                                                      Hammersmith (19) have grown by 43%
opens in 2018, and this will help sustain             since we released our original Hotspots              micro geographical
buyer demand.                                         report four years ago. We expect them to             level and assess
                                                      hit an average of £1,250 psf by 2016. A
Previously we twinned Paddington (20)
                                                      planned £150m regeneration of the town               schemes against
with Bayswater as a hotspot, but the
markets have since diverged in such a
                                                      centre including new retail, restaurant and          local characteristics.
                                                      café space, a new town square, cinema
way that we have separated them. The
                                                      and new homes, will enhance the appeal               Margin will be driven
fundamentals of the Bayswater market
have already been examined in this report.
                                                      of the area. The relative discount, in terms         by detail, not generic
                                                      of price per square foot, compared to
The opening of Crossrail at Paddington
                                                      more central prime locations is also likely
                                                                                                           overviews and for
from 2018 is already giving the area
surrounding the station a boost with travel
                                                      to underpin demand.                                  those who continue to
times across London set to be drastically             Over in the east of the city, price growth           challenge and explore
reduced. Prices of new-build property                 in City Road Corridor (24) has already
                                                      exceeded our original forecast, with
                                                                                                           opportunity, we
have stepped up from averaging £1,300
psf in 2011 to £1,600 today, and this could           £1,300 psf now achievable for the                    believe the London
reach £1,700 by the end of next year,                 best prime new-build schemes. The
                                                      emergence of Tech City as a burgeoning
                                                                                                           market has some
before moving up another 10% in line with
our wider forecasts by the end of 2018.               cluster of hi-tech and digital companies             exciting years ahead.”
                                                      based around Old Street roundabout                  Ian Marris, Joint Head of
White City/Westfield (22) was                         has been a game-changer in terms of                 Residential Development
designated an “opportunity area” by                   driving regeneration on City Road.
the Mayor of London in 2011. There are                The area’s proximity to the City,
plans in place for a retail and residential           Shoreditch and Farringdon (all less than
mixed-use development with more than                  a 10 minute walk) has been a further
5,000 new homes, a university campus,                 driver of buyer demand.

FIGURE 7
2011 Hotspots
How new-build prices have performed

    City Road
     Corridor

Hammersmith

 Marylebone/
    Fitzrovia

     Midtown

 Paddington*

 South Bank/                                                                                                      2011 - PRICE RANGE
  Blackfriars
                                                                                                                  2015 - CURRENT PRICE RANGE
   White City/                                                                                                    2016 - FORECAST PRICE RANGE
    Westfield
                 £0    £700       £900       £1,100   £1,300   £1,500   £1,700    £1,900   £2,100    £2,300   £2,500   £2,700   £2,900   £3,100

Source: Knight Frank Residential Research
*prices revised due to separation of areas

                                                                                                                                             11
GLOBAL BRIEFING
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  For the latest news, views and analysis
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    on the world of prime property, visit
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 KnightFrankblog.com/global-briefing

   FIGURE 8
   Knight Frank Residential Market Forecast Q1 2015                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        RESIDENTIAL RESEARCH
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Gráinne Gilmore
    Residential sales markets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Head of UK Residential Research
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           +44 20 7861 5102
                                                                          2014                                2015      2016                                                                    2017                                                                                                          2018          2019                                                                                     2015-2019
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           grainne.gilmore@knightfrank.com
    London                                                               17.8%                                   3.5%   4.0%                                                                                 5.0%                                                                                                    5.5%        5.5%                                                                                                                                                          25.8%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Oliver Knight
    Prime Central London                                                      6.7%                               0.0%   4.5%                                                                                 5.0%                                                                                                    5.0%        6.0%                                                                                                                                                          22.1%                                                                                                                                       Residential Research
    Prime Outer London                                                   10.5%                                   3.0%   5.5%                                                                                 5.0%                                                                                                    5.0%        5.0%                                                                                                                                                          25.8%                                                                                                                                       +44 207861 5134
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           oliver.knight@knightfrank.com
   Source: Knight Frank Residential Research
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           RESIDENTIAL DEVELOPMENT
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Justin Gaze
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Joint Head of Residential Development
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           +44 20 7861 5407
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           justin.gaze@knightfrank.com
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Ian Marris
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Joint Head of Residential Development
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           +44 20 7861 5404
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           ian.marris@knightfrank.com
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Rupert Dawes
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Head of New Home Sales
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           +44 20 7861 5445
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           rupert.dawes@knightfrank.com
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           James Mannix
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Head of Residential Capital Markets
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           +44 20 7861 5412
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           james.mannix@knightfrank.com
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Charlie Hart
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Head of City and East
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           +44 20 7718 5222
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           charlie.hart@knightfrank.com
Knight Frank Residential Research provides strategic advice, consultancy services and forecasting
to a wide range of clients worldwide including developers, investors, funding organisations,
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advice customised to their specific needs.

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       this document (“Information”) in any way. You
RECENT MARKET-LEADING RESEARCH PUBLICATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            must make your own independent enquiries,
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       inspections and searches and take your own
                                                                                                                                                                                                                                                                                                                             RESIDENTIAL RESEARCH
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       independent professional advice.
                                                                                                                                                                                                                                                                                                                             PRIME CENTRAL
                                                                                                                        RESIDENTIAL RESEARCH
 RESIDENTIAL RESEARCH                            RESIDENTIAL RESEARCH
                                                                                                                        RESIDENTIAL DEVELOPMENT
                                                                                                                        LAND INDEX                                                                                                                                                                                           LONDON SALES INDEX

                                                                                                                                                                   GREENFIELD LAND PRICES RISE                                                                                                                                                                            PRICE GROWTH EDGES LOWER
                                                                                                                                                                                                                                                                                                                                                                          IN PRIME CENTRAL LONDON AS
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       The Information is not definitive and is not
 CROSSRAIL                                       UK TENANT
                                                                                                                                                                   2.3% IN 2014
                                                                                                                                                                                                                                                                                                                                                                          ELECTION NEARS

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       intended to give advice about properties,
                                                                                                                                                                   The growth in land values moderated across England and Wales in the
                                                                                                                                                                   final quarter of 2014, reflecting the movement in the wider housing market.                                                                                                                            Activity in prime central London remains subdued though there are some
 ANALYSING PROPERTY MARKET PERFORMANCE                                                                                                                             However residential development land values in prime central London                                                                                                                                    exceptions to the rule, says Tom Bill

                                                 SURVEY 2014
                                                                                                                                                                   continued their strong growth, ending the year up 24%. Gráinne Gilmore
 FROM READING TO SHENFIELD 2015                                                                                                                                    examines the latest market trends.
                                                                                                                                                                                                                                                                                                                                                                          Annual house price growth in prime central                                                                                 and St John’s Wood.
                                                                                                                                                                                                                                                                                                                             MARCH 2015                                   London declined marginally to 3.3% in March as
                                                                                                                        Key facts Q4 2014                          Greenfield residential development land                                                         turn, has started to weigh on pricing as

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       markets, policies, taxes, currencies or any other
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Islington has benefitted from the fact property
                                                                                                                                                                   values remained broadly static in the final                                                     while there is still sturdy competition for                                                            the UK general election drew nearer.
                                                                                                                                                                                                                                                                                                                             Annual price growth slows to 3.3% as                                                                                                                                    taxes such as stamp duty have affected
                                                 PRIVATE RENTED SECTOR RESEARCH                                         Average greenfield residential
                                                                                                                        development land prices up 2.3% in
                                                                                                                                                                   quarter of 2014, rising by just 0.1%.
                                                                                                                                                                   This took the annual rate of growth to
                                                                                                                                                                                                                                                                   good sites, it is less fierce.
                                                                                                                                                                                                                                                                   Another factor weighing on greenfield land
                                                                                                                                                                                                                                                                                                                             May’s election gets closer                   It was the lowest rate in more than five years
                                                                                                                                                                                                                                                                                                                                                                          and despite a 0.1% rise in March, prices have
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     lower-value properties to a lesser degree than
                                                                                                                                                                   2.3%, well under the 7.2% rate of growth                                                                                                                                                                                                                                                                                          higher-value areas and annual growth of 7% is
                                                                                                                        2014, after a 5.3% rise in 2013                                                                                                            prices is the increasing cost of labour and                                                            remained broadly flat over the last six months
                                                                                                                                                                   seen in house prices. However it is likely                                                                                                                Monthly growth of 0.1% as prices                                                                                                                                        the second-highest in prime central London after
                                                                                                                                                                                                                                                                   materials. The industry is still gearing up                                                            as uncertainty surrounding the outcome of the
                                                                                                                                                                   land price growth will remain subdued                                                           after the recession, and recruitment of                   remain broadly flat over last six months                                                                                                                                Hyde Park.
                                                                                                                        Prices rose by 0.1% in Q4, the most                                                                                                                                                                                                               election on 7 May intensifies.
                                                                                                                                                                   over the coming year as rising costs                                                            new tradesmen is proving problematic in
                                                                                                                        modest growth since Q4 2012                                                                                                                                                                                                                                                                                                                                                  Sales in Knightsbridge have been strong
                                                                                                                                                                                                                                                                                                                                                                          Activity is stronger in lower price brackets and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       matters. The Information may not be accurate
                                                                                                                                                                   press on margins.                                                                               many areas. It is no coincidence that the                 Activity stronger in lower price brackets                                                                                                                               due to a series of high-quality new-build and
                                                                                                                                                                                                                                                                   cost of building in the UK has risen up the                                                            where there is a more pressing need to act,
                                                                                                                                                                   Activity in the land market has certainly                                                                                                                 but there is pent-up demand in other
                                                                                                                        Land values in prime central London                                                                                                        international rankings. It is now the 8th                                                              though some parts of the market are treading                                                                               newly-refurbished properties that are ready
                                                                                                                                                                   picked up over the last 12-18 months                                                                                                                      parts of the market
                                                                                                                        climbed by 6.4% in Q4 2014, taking                                                                                                         most expensive country in which to build,                                                              water ahead of the vote.                                                                                                   for immediate occupation. Buyers in prime
                                                                                                                                                                   – this is reflected in 17% rise in private
                                                                                                                        the annual rise to 24%                                                                                                                     from 43 countries surveyed, according                                                                                                                                                                                             central London are increasingly focussed on
                                                                                                                                                                   units under construction across the UK in                                                                                                                                                              One of the most unpredictable elections in
                                                                                                                                                                                                                                                                   to Arcadis, the design consultancy firm –                 Stronger activity in Knightsbridge due                                                                                                                                  the quality of the property’s finish and facilities
                                                                                                                                                                   December 2014 compared to December                                                                                                                                                                     decades has caused some buyers and sellers to
                                                                                                                                                                                                                                                                   although the relative strength of sterling to             to high-quality new properties                                                                                                                                          rather than its postcode, though in the case of
                                                                                                                        Land prices in prime central London        2013. There has been an increase in activity                                                                                                                                                           postpone decisions until there is clarity around
                                                                                                                                                                                                                                                                   the Euro this year has also played a part in
                                                                                                                                                                   in most regions, as shown in figure 2. The                                                                                                                                                             the outcome.                                                                                                               Knightsbridge both have combined to produce a

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       and all of the subject matter may change without
                                                                                                                        up 48% since September 2011                                                                                                                this calculation.
                                                                                                                                                                   demand for new housing is also robust                                                                                                                     Annual growth of 7% Islington as area                                                                                                                                   strong sales market at the start of 2015.
                                                                                                                                                                   across most parts of the country, with the                                                                                                                affected less by recent tax changes          As electioneering got underway in March, the
                                                                                                                                                                   take-up of the Government’s Help to Buy                                                                                                                                                                polls still indicate a hung parliament is the most                                                                         Meanwhile, St John’s Wood is benefitting as
                                                                                                                                                                                                                                                                   FIGURE 2
                                                                                                                                                                   Equity Loan scheme rising to 38,052 in the                                                      Change in number of residential                                                                        likely outcome.                                                                                                            more buyers seek better value and more space
                                                                                                                                                                   20 months to November 2014, with some                                                           units on site (under construction)                                                                     However, strong activity in some markets                                                                                   than markets further south in central London.
                                                                                                                                                                   83% of these being first-time buyers.                                                           December 2014 v December 2013
                                                                                                                                                                                                                                                                                                                                                                          suggests there is a degree of pent-up demand                                                                               While the overall picture is subdued, what is
                                                                                                                                                                   The supply of land has also risen, with the                                                                                                                                                            that could be released after May.                                                                                          happening in these three markets highlights

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       notice. So far as applicable laws allow, neither we
                                                                                                                                                                   activities of land promoters helping boost
                                                                                                                                                                                                                                                                                                                                                                          The top three markets by sales volumes at the                                                                              some key trends that could contribute towards
                                                                                                                                                                   the pipeline of oven-ready sites. This, in
                                                                                                                                                                                                                                                                                                                                                                          start of 2015 have been Knightsbridge, Islington                                                                           driving the market after the general election.

                                                                                                                                                                   FIGURE 1                                                                                                                                                                                               FIGURE 1                                                                                                                   FIGURE 2
                                                                                                                                                                   Development land values                                                                                                                                                                                Price growth is stronger in                                                                                                Slowing growth
                                                                                                                                                                   Quarterly changes, Sep 2012 - Dec 2014
                                                                                                                                                                                                                                                                                                                                                                          lower price bands (Rebased to 100)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Annual Growth

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       nor any of our members, consultants, ‘partners’
                                                                                                                                                                   8%                                                                                                                                                                                                                        £1m to £2m
                                                                                                                                                                                     PCL                                                                                                                                                                                  108                £2m to £5m
                                                                                                                                                                                     ENGLAND AND WALES                                                                                                                                                                                       £5m to £10m
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             3.3%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             4.0%

                                                                                                                                                                   7%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      7.5%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               7.5%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          7.8%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      8.1%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   7.9%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                7.7%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           7.4%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         6.5%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  6.1%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           5.1%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    4.6%

                                                                                                                                                                                                                                                                                                                                                                          107                over £10m
                                                                                                                          GRÁINNE GILMORE                                                                                                                                                                                                                                                    Prime central London average

                                                                                                                                                                                                                                                                                                                               TOM BILL
                                                                                                                          Head of UK Residential Research          6%                                                                                                                                                                                                     106

                                                                                                                                                                   5%                                                                                                                                                          Head of London Residential Research        105

                                                                                                                         “Price growth for residential                                                                                                                                                                                                                    104
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Mar-14

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                                                                                                                                                                   4%
                                                                                                                          development sites is likely                                                                                                                                                                          “Strong activity in some                   103
                                                                                                                          to be more subdued over                  3%
                                                                                                                                                                                                                                                                                                                               markets suggests there is a                102                                                                                                                        Monthly Growth

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       or employees will have any responsibility or
                                                                                                                          the coming year as rising                2%
                                                                                                                                                                                                                                                                                                                               degree of pent-up demand                   101                                                                                                                         0.8%
                                                                                                                          construction costs press                 1%                                                                                                                                                          that could be released after                                                                                                                                           0.6%
                                                                                                                                                                                                                                                                                                                                                                          100
                                                                                                                          on margins.”                             0%                                                                                                                                                          May”
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      0.4%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      0.2%
                                                                                                                                                                                                                                                                                                                                                                           99
                                                                                                                         Follow Gráinne at @ggilmorekf                                                                                                                                                                         Follow Tom at @TomBill_KF                                                                                                                                              0.0%
                                                                                                                                                                   -1%                                                                                                                                                                                                     98                                                                                                                        -0.2%
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 HOW HAVE PRICES                                                     WHERE ARE THE IDEAL                                                                                                                                                                                                                                        Global Briefing or @kfglobalbrief         Source: Knight Frank Residential Research                                                                                  Source: Knight Frank Residential Research
                   MEASURING SUPPLY   OUTLOOK                                                                            Global Briefing or @kfglobalbrief         Source: Knight Frank Residential Research                                                       Source: Knight Frank Residential Research, Glenigan

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