Up to 20% of London’s office space could be converted to houses according to some commentators, as the demand for housing in the capital rises.
Despite falling house prices across much of the UK, the cost of houses in the Capital continues to rise and has led to speculation that landlords will engage in large-scale refurbishments – turning offices in to homes as they seek to cash in on this buoyant market.
As reported late last month, this trend has already revealed itself in areas such as Mayfair, where foreign investors seeking an exclusive address has caught the eye of commercial landlords as residential prices outstrip the traditional sq. ft. cost paid by office tenants in the area.
It is also believed that the relocation of many financial firms from the City to Canary Wharf, where costs have remained notably lower and therefore attractive in cash-conscious times, has helped to fuel this trend further.
Despite this the demand for office space in the Capital does remain strong, with new developments in the pipeline and a stated requirement for more grade A space being required sooner rather than later.
Should the residential “boom” impact on office stock, rental prices are likely to increase as competition for office space in key areas of the capital rises – in addition to encouraging businesses to consider office space away from the traditional “hot zones” of the office markets.