Luxury tower blocks 'squeeze out Londoners as prices boom', research shows
The huge flood of foreign money into the London property market is funding an unprecedented “luxury tower boom”, according to new research.
There are 37 residential blocks of more than 10 storeys high under construction in the capital compared with just 28 at the last peak in 2007.
Many are strung out along a stretch of the south bank of the Thames and critics say they are aimed more at attracting wealthy Asian investors than providing housing for working Londoners.
The new figures came as leading economists warned that warning lights “are flashing” over the risk of a new house price bubble in London,
Nadia Elghamry from Estates Gazette magazine, which compiled the data, said: “Planning applications for new schemes in London increased by 25 per cent in 2013, the highest for at least 10 years and nearly double the level in 2008, when Lehman Brothers collapsed.
“Over half the homes planned are in a necklace of towers to the south of the river from Canning Town, with London City Island in the east over to Battersea Power Station. Those aren’t locations Londoners associate with prime or super-prime, but they are commanding Mayfair prices.”
The data also shows that the level of affordable housing in tower developments has fallen to 22 per cent, against almost 40 per cent in 2007.
The regeneration of much of the south bank, particularly the Nine Elms area of Vauxhall and Battersea and rising property values means wealthy foreign buyers are moving into areas where traditionally Londoners have bought homes to live.
The new figures, commissioned by BBC1’s Inside Out programme, come days after the Standard revealed growing concern about the impact of “monster towers” on London’s skyline.
Economists from the EY ITEM Club say average house prices in the capital could hit nearly £600,000 within four years, and the spiralling cost of homes is spreading to outlying boroughs. They called for limits on big mortgages to stop the market “overheating”, as think tank Civitas suggested restrictions on foreign buyers.