Mixed views are emerging on the outlook for prime home prices in central London following a tepid 2016 when the surprise Brexit vote and stamp duty hikes dampened demand.
Mr Rob Tincknell, chief executive of project manager Battersea Power Station Development Company, told The Straits Times he expects a market jump in the next couple of years. Citing property agents, he says the values of London prime homes could go up by 5 to 10 per cent in the next two years: "What we are seeing now are very strong green shoots of life appearing back in the residential market."
Some analysts are more cautious on the outlook. CBRE said in a first-quarter report on central London housing: "Despite some recovery in sales volumes and price growth, buyers remain price sensitive. As a result, we expect a continuation of the more challenging operating environment in the year ahead."
Mr Tincknell is visiting Singapore to update investors on the £9 billion (S$16 billion) project in south-west London being developed over eight phases. His optimistic view of the market is in line with reports from some real estate consultancies.
CBRE noted a 5 per cent rise in prices over the three months to February 2017. Sales volumes climbed 6.3 per cent in the over the same period. JLL noted in a report out last month: "The number of international buyers in particular has risen, following the weakening of the pound after the Brexit vote."
Battersea Power Station is a mixed development project owned by Malaysia's Sime Darby, S P Setia and Employees' Provident Fund. More than £100 million worth of homes at the 17-ha project were sold last year. Mr Tincknell said the apartments have done well on the leasing market, with yields averaging at 4.6 per cent for 50 leasing deals done recently: "There's also a significant amount of optimism about the future, people are now looking forward to a much more stable government in the not too distant future."
But market watchers flagged potential uncertainties with Britain's general election next month, and cautioned buyers remain price sensitive. There are also concerns of a potential oversupply of high-end homes near Battersea Power Station. Sales, meanwhile, have been brisk at the project, slated for completion by 2025/26. Phases one and two are almost all sold, while 400 of 1,363 units in phase three have found buyers.