A posh location is no longer the primary driver of buyer demand in London’s luxury residential development, a new report finds.
Buyers at the top-end of London’s residential market are seeking the right mix of space, design layout and certain amenities when deciding on a purchase—even if it’s beyond the city’s traditionally most exclusive central neighborhoods—according to a study Monday from Knight Frank, a global property consultancy.
“Buyers today are increasingly looking for best in class product, crucially where they see value, not a specific area or post code,” Ian Morris, Knight Frank’s joint head of residential development, said in a statement. “As the market becomes ever more product-led, the importance of getting the unit’s mix, apartment configuration and quality right has never been more relevant.”
In 2016, new residential development in London fell to 17,070, down from 25,600 in 2015. The dip was due to a variety of factors, including a rise in construction costs, tax changes, currency fluctuations, the study says, and buyers are increasingly looking for what they perceive as value in a new apartment.
To entice prime-market buyers to new developments, the study found several factors appear most desirable for buyers outside of location, according to a Knight Frank survey of those who purchased in new prime London apartment buildings (defined as in the top 10% of London’s residential market). Knight Frank did not state how many people responded to the survey.
In apartment design, for example, natural light and high ceilings were key. Some 90% of buyers in new prime developments who responded to the survey said ceiling height was important in their decision to purchase.
Certain amenities are important to prime buyers, including security, concierge services and underground parking, but a host of other shared building amenities, like a steam room or pool are considered less desirable if the service fee is too high, the study says. For example, 69% of those who responded said, for the same price, they would rather buy a larger apartment in a building with just a concierge, than a smaller apartment with a slew of amenities, including a shared lounge, cinema and pool.
The study also found that buyers are more interested in quality-built apartments than new homes featuring the latest trend in technology “gimmicks.” More than 43% of those who responded to the survey said that super-fast broadband internet was important in a building, but other features, like built-in surround sound speakers or “smart” lighting were less important.
“Our message and advice to clients is to ensure that design delivers an evolution of proven standards and practices,” Knight Frank said in the report. “Keep materials simple, be confident, focus on high standards and avoid gimmicks.”
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