At the height of the recession, construction in the City of London ground to a halt. Now, as the economy begins its tentative recovery, the skyline of the Square Mile is punctuated with cranes once more. The City has long been a commercial district, its 7,000 residents vastly outnumbered by its 382,700 strong workforce, but that is changing: many of those cranes have been set up to assist in the building of thousands of homes.
A new study by property consultant CBRE reveals that the number of new homes being built within the City and its immediate hinterland exceeds that in Docklands, the South Bank and the West End. There are 2,317 units under construction, another 1,680 with planning permission and 1,640 more going through the system. These are extraordinary numbers, given that between 2001 and 2011 just 1,000 homes were built in the City, according to the latest census.
“Traditionally you do not think of the City as a residential area,” says Jennet Siebrits, head of residential research at CBRE. “It always used to be a place where people worked but now they want to live and socialise there too.”
Not everyone is delighted by these developments. Siebrits sees this change as a logical step in the area’s evolution, but Peter Rees, chief planner at the City of London, fears that the loss of office space will damage the Square Mile’s viability as an international business hub. “The UK will no longer have a world-class business and financial centre,” he argues.
Despite these fears, the City’s nascent property market appears to be flourishing. The CBRE calculates that the value of new-build schemes in the area surged 25 per cent between 2010 and 2012, to up to £2,500 per sq ft. In the same period, new-build prices in Greater London rose 9.6 per cent and in prime central London 24 per cent.
Almost all these new City developments are top-end. In March, for example, Nick and Christian Candy, the developers behind One Hyde Park, London’s most expensive residential development, were given planning consent to build a Norman Foster-designed development of 165 apartments near the Tower of London. “We can guess what kind of price point that is going to be,” says Siebrits.
The forerunner of the City’s residential rebirth is the Heron, a 36-storey tower containing 285 apartments, due for completion this summer. In the past two years Heron International has sold more than 92 per cent of its units off-plan; currently on the market are apartments on the upper floors priced at between £2.5m and £5.25m (www.theheron.co.uk).
Leon Stone, sales manager at the City branch of Hamptons International, believes 90 per cent of City buyers are primarily interested in cutting their commute. “It is all about the convenience,” he says. “They are working long hours. They are not buying for the lifestyle. If you want parks and shops and open spaces, you would look elsewhere.”
Key new projects include Roman House – a development of 90 flats being built on Wood Street, beside St Alphage Gardens. Studio apartments start at £565,000 and penthouses are priced at up to £4.5m. About half of the units have been sold off-plan since July 2012, with a broadly even split between owner-occupiers and investors. Some have been bought by parents who hope their student offspring will begin to forge a City career by the time the properties are ready next year.
The supply of new units shows no sign of tailing off. Taylor Wimpey is redeveloping St Dunstan’s Court on Fetter Lane, a former Ministry of Justice office, into 76 one- and two-bedroom apartments that will launch next year with an anticipated entry price of about £800,000 (www.stdunstanscourt.com).
Meanwhile, in Aldgate, just to the east of the City (an area being rebranded the City Fringes, and included within the CBRE report), activity is frenetic. Altitude, a 27-storey tower by Barratt London off Whitechapel High Street, will be completed this summer, with one-bedroom flats starting at £475,000 (www.altitude1.co.uk). And one of the largest projects is Goodman’s Fields, a mixed-use scheme by architects Lifschutz Davidson Sandilands for Berkeley Homes, which includes 920 homes, facilities such as a cinema and health club, a central piazza and a park. The first owners will move in 2015, and prices range from £490,000 for a studio flat to £5m for a penthouse (www.berkeleygroup.co.uk).
The other hotspot is around City Road, just north of the Square Mile, where developments include the 30-storey Canaletto tower (www.canalettolondon.com). The building, due to complete in 2015, will contain 190 flats. Prices start at £390,000 for a studio and £1m for a two-bedroom flat on floors one to 11. Meanwhile, Galliard Homes has just completed 14 apartments and town houses on Rampart Street, with prices starting at £550,000 for a two-bedroom flat and £775,000 for a three-bedroom house (www.galliardhomes.com), and is currently on site at Ludgate Circus, close to St Paul’s Cathedral, and Red Lion Court.
Rees points out that the cost of these new development puts them out of reach of most ordinary Londoners. However, David Galman, Galliard Homes’ group sales director, says the City’s historic place at the heart of Britain’s financial industry is already withering.
“Isn’t Canary Wharf London’s financial centre now anyway?” he asks. “It is enormous and the buildings are more modern and user-friendly.”
● The City’s crime rate is low, at 17.62 crimes per 1,000 residents per year (HM Inspector of Constabulary, 2012)
● Road traffic accident figures are the highest in the UK, and stood at 372 per 10,000 residents in 2011
● Only 600 children aged 14 and under live in the City
● By 2021 the Greater London Authority predicts there will be 9,190 City residents, a 24 per cent increase
What you can buy for …
£5m A penthouse apartment at the new Goodman’s Fields development in Aldgate
£1m A two-bedroom flat at Galliard Homes’ Ludgate Broadway development
£500,000 A one-bedroom resale flat in an older development