What the sale of this Chelsea garage says about the London property market
Posted on Thursday, December 8th, 2016
Earlier this year, a single garage in London sold for £360,000 at auction. At over twice its auction price, the sale was understandably picked up by the mainstream media, further fuelling the discussion of property prices in London. However, what does this mean for the wider market, and what more can be done to improve the state of property and home ownership in the capital?
A similar-sized garage sold for £500,000
The Chelsea garage sale
Measuring in at just 146 square feet, the Chelsea garage was an expensive buy. But for Londoners who are looking for real estate – or homeowners who want a place for their beloved vehicles – it was a small price to pay. Within proximity to South Kensington tube station, the garage is ideal for storage or conversion and is a bargain when you consider the fact that the average SW3 property sells for £2.4 million. The sale is not the only one of its kind, as, in 2014, a similar-sized garage sold for £500,000 with planning permission for a one-storey home with a basement, two bedrooms, kitchen, living room, bathroom, en-suite and patio.
London property is expensive
While we don’t need to repeat how expensive London property can be, the sale highlights just how much people are willing to pay for their own piece of land in the capital. Properties in the capital average at £527,349, compared to the UK average of £233,254.
The uncertainty of Brexit isn’t affecting the market
The fallout of Britain’s decision to leave the European Union has not been as impactful as first thought, but buyers are still exercising some caution in the market. Nationwide’s latest figures suggest that property market growth has slowed to 5.3 percent across the United Kingdom, but with interest rates now at a record low of just 0.25 percent, homeowners should find it easier than ever to get on the property ladder. Stories like the Chelsea garage sale are further evidence of an unassailable property market – but what happens when Article 50 is triggered remains to be seen.
By 2025, only 40 per cent of Londoners will be able to afford their own homes
Home ownership in London continues to suffer
For decades, financial analysts have been warning of a generation of renters, and new figures suggest that this may be the case. By 2025, only 40 per cent of Londoners will be able to afford their own homes – the rest will be subject to a life of renting in the capital.
There are unique opportunities for investment
For those who want to buck the trend and get a foot on the property ladder, making a home from something unusual is often the only way. One man turned his driveway into one of London’s thinnest properties, and a similar property recently sold in the capital for a whopping £1.25 million.
Living in a garage is certainly not for everyone, but the sale opens a unique opportunity to turn prime real estate into a rental opportunity. It’s possible to convert a garage into accommodation with the necessary planning permission – if this were to be the case, it would highlight the lengths at which property developers will go to secure key London properties on a budget.
If you have property in the capital, don’t hesitate to get in touch with the Together Property Management team today. We’re on hand to provide specialist property management solutions that are catered to your unique requirements.