New home registrations in London last year rose to the highest in at least 26 years as the government supported lending and Asian buyers sought properties in overseas markets.
Registrations increased 60 percent from a year earlier to 26,230, the National House-Building Council, a new-home insurance and warranty provider, said in a report today. That’s the highest since the group began keeping electronic records in 1987.
“We are not popping the champagne corks just yet,” NHBC Chief Executive Officer Mike Quinton said in the statement. “This recovery has been from a historically low base. The U.K. still has a chronic shortage of new homes.”
London has led the recovery in U.K. home prices as investors from abroad sought to protect wealth from economic and political turmoil at home. Two-thirds of new London homes sold before completion are being purchased by Southeast Asian buyers, according to Land Securities Group Plc, the U.K.’s largest real estate investment trust. Price gains are spreading to regions outside the U.K. capital, spurring increased home construction.
The London registrations include 864 homes at Battersea Power Station and Berkeley Group Holdings Plc’s One Blackfriars apartment tower overlooking the City of London, the report said.
Nationwide, new-home registrations increased by 28 percent last year to 133,670, the most since the economic downturn began in 2007, according to the report.
Home values in England and Wales climbed 4.4 percent last year, according to the Land Registry. Government lending programs such as Help to Buy have contributed to the recovery, the NHBC said.
New home registrations will reach 150,000 this year, Quinton said in an interview. That’s still below a target of 200,000 that the opposition Labour Party said it would set if it wins parliamentary elections next year. Registrations exceeded 200,000 just once, in 2007, during the last 20 years.
Developers typically register about 80 percent of new home projects in the U.K. with the NHBC shortly before construction starts, according to the report.
Wales, with a 12 percent drop in registrations, was the only U.K. region that saw a decline, according to the NHBC report. The number of new home buyers age 55 or more rose to 25.9% last year from 20.8 percent in 2012, it said.