15 Dec 15.12.2017 Tech companies cause house prices in Silicon London to rise
15.12.2017 Tech companies cause house prices in Silicon London to rise
Martin Bikhit, managing director of an estate agency said ‘Tech giants are choosing to move their international headquarters [here], ramping up their investment in the UK‘, with ‘Fitzrovia fast becoming a creative tech hub’. Cheaper relocation costs, due to the weakening sterling, are attracting more companies to the capital, even despite the high living costs, in comparison with many other tech cities.
This year, Facebook moved its headquarters to One Rathbone Square, new Rathbone Square development, near Tottenham Court Road, in Fitzrovia. Snap, parent company of social media platform Snapchat has agreed to lease the whole of 7-11 Lexington Street in Soho. Google is expanding its presence in King’s Cross and moved around 2,500 staff into their new London office at 6 Pancras Square in King’s Cross. Twitter has established European headquarters in Soho, Apple decided to move to Battersea and Instagram has set up shop a short walk away in Covent Garden.
As a result, even despite all the new developments, the limited supply of new properties in Soho, Fitzrovia and King’s Cross will cause prices to rise. Property consultants claim that the effect of the tech companies on London’s property market has already been felt. A two-bedroom flat in King’s Cross costs, on average, just over £1m. Facebook has had a presence in the capital since 2007; Google first announced its move to King’s Cross in 2012.
The average price of an apartment in Fitzrovia, Bloomsbury, King’s Cross and Soho has increased by about 50% over the past 5 years. A three-bedroom house between Fitzrovia and King’s Cross is available for about £1.25m and a two-bedroom penthouse with a roof terrace at Rathbone Square sells for £3.39m. A three-bedroom flat on Soho’s Sherwood Street comes at £3,177 per square foot.
It is anticipated that the values of luxury properties to increase by around 10% over the next five years across some London boroughs. Thus, while landlords looking to rent out their units will benefit from the new tech arrivals, affordability will continue to be the key issue for many would-be buyers.