UK construction sector
The rapid expansion of house building will not quell house price rises(Reuters)

London estate agent Stirling Ackroyd has predicted that house prices will still soar over the next 10 years despite Britain's capital potentially gaining over half a million new homes over the next decade.

The group predicts that new build projects in the capital could deliver 570,000 extra homes, enough to match expected demand by 2024, as Southwark, Tower Hamlets, Islington and Hackney are set to become London's hotspots for property.

"London can build the extra space required to house its own rapid success," said Andrew Bridges, managing director of Stirling Ackroyd.

"To keep up with a growing population these opportunities are likely to become reality over the next 10 years. Even a cautious projection puts the capital's population at nine million before 2020, and half a decade before that landmark the city already needs more homes.

"Yet this level of development is not impossible or even unlikely. It's already starting."

London's population is estimated to expand by 920,000 people between 2014 and 2024 and this will require the creation of 570,000 new homes [Figure 1].

However, the estate agent said that, at 2014 prices, even before any increase in London property prices, new homes could add a total of 198bn (250bn, $317bn) to the capital's gross property wealth.

"House prices in the capital are likely to rise significantly between now and 2024. But even at today's prices, developers have a strong incentive to make these prospects into reality," said Bridges.

"Getting sites off the drawing board is always a challenge in such a historic and valuable city. However, for developers with homes ready to sell in the capital, there is always a market from all types of buyers.

"Those planning new schemes will be able to count both on London's economic renaissance and its inevitable population growth over the next decade. Every opportunity mapped here is matched by expected demand