Real Estate Investor Magazine South Africa May 2016 | Página 54

UK INVESTMENT

London Residential

Property Forecasts
Demand outstripping supply
BY JAMES GLEW

A

s the political and economic capital, London’s
demand for housing continues to outstrip
supply.
By attracting the largest proportion of international
workforce and with a high birth rate, London has the
fastest growing population of any region in the UK.
However, London’s housing stock only grew in line
with the England average between 2001 and 2007 (5
per cent growth) and just out-performed the national
average in the following six years (4.9 per cent versus
4.3 per cent).
By failing to offer the quantity and type of housing
needed at an affordable pace, large numbers of
London’s workers commute from outside the region
to work. With increasing pressure on the housing
stock, between 2001 and 2011 the number of people
commuting into London increased from 724k to
793k. However, this trend is dwarfed by the 680k
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MAY 2016 SA Real Estate Investor

additional people living in the capital and working in
inner London.
Overspill demand from London may be driving
house price growth across the south of England but
the largest pressures remain in the city where growing
numbers of people are living, working and studying.
The political response to this housing gap has been
a combination of first-time buyer incentives to get
people on the housing ladder, and increasing the
tax burden on buy-to-let investors to reduce the
competition they face.
First-time and second-step buyers face substantial
difficulties in accumulating a sufficient deposit to get
on or move up the housing ladder. As an example the
average deposit for a first time buyer in London in 2015
was over £75,000. Furthermore, mortgage regulation
means homeownership among younger households,
who tend to try borrow the entire purchase price, is
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