Martin Bikhit, Managing Director of Kay & Co writes about the influx of tech giants from Google to Instagram moving into the area and what this means for house prices.
Autumn always sees an uplift in business after the summer months, and 2017 has been no exception. Many political headlines have been about the Brexit negotiations and the continued discussions. Yet our sense is that property investors are far more hard-headed, than politicians.
They are looking at central London and, in particular Fitzrovia, Soho and King’s Cross. The fall in the pound post-Brexit has made asking prices more attractive to overseas investors and, in consequence, the market has remained remarkably buoyant.
In Soho and Fitzrovia, flat prices are up on 52 per cent on five years ago, according to recent figures from LonRes. In King’s Cross, the figure is slightly lower, at 48 per cent, but the real story there is how quickly properties are selling. In the second quarter of 2017, 53.7 per cent of properties on the market in King’s Cross sold within three months. The comparable figure for central London as a whole was just 25.4 per cent.
Why the sudden micro-boom in this part of London? There are several factors in play, but the key one, is the way so many tech giants that have moved into the area. From Google in King’s Cross, Twitter in Soho, Facebook and Instagram in Fitzrovia, to Snap – the parent company of Snapchat – which has just announced that it is moving its international headquarters to Fitzrovia.
This is not just a significant vote of confidence in post-Brexit London but also, we believe, a harbinger of rising property prices. Data from Oxford, Cambridge and Reading, which have all been transformed into tech hubs and seen property prices surge by 60 per cent in the past five years as a result. This suggests a clear correlation between property values and modern, forward-looking industries.
Fitzrovia, once associated with the rag trade, is now increasingly a magnet for a younger crowd and savvy urban professionals attracted to high-end apartments in new boutique developments. And developers, for their part, are rising to the challenge.
South of the river, in Battersea, another micro tech hub, over-supply has had a knock-on effect, impacting on both prices and rental yields alike. But in Fitzrovia, Soho and King’s Cross, supply has been far more carefully controlled, to ensure a stream of new high-end apartment schemes in the coming years. It promises to be an exciting time, as the regeneration of the area proceeds apace and a new wave of young professionals make their home in this vibrant business hub.
We have seen a lot of changes in our area over the years. But this feels like a time of real opportunity – which is why we are confident about the future of the local housing market.
• Martin Bikhit, Managing Director of Kay & Co, has more than 20 years’ experience in the London property sector.
• Contact Kay & Co estate agents for details of properties for sale or to rent in Marylebone, Bayswater, Paddington, Notting Hill, Mayfair, Fitzrovia, Regents Park and The West End (020 7262 2030; Kay & Co).