London has become rather a hub for global technology companies in recent times – with tech centres booming in a number of areas throughout the capital. It’s not just London, either; the major university cities of Oxford and Cambridge have become a thriving hotbed for technology parks, start-ups and new tech ventures.
And now it’s been revealed that London’s tech centres are set to boom in spite of Brexit, despite concerns about a brain drain, a lack of funding and a lack of investment in a burgeoning industry.
Estate agency Kay & Co has used the experiences of Cambridge and Oxford – as well as Reading, another booming technology city – to forecast that parts of central London’s housing market will thrive due to significant investments from global technology giants.
Already, Old Street is known as the Silicon Roundabout thanks to the high number of web and tech firms based there, while the areas broadly between Old Street and Shoreditch form what is known as East London Tech City.
However, other parts of the capital are getting in on the action as tech firms shun the Silicon Roundabout (the home of so many start-ups) and look to other tech hubs instead.
Apple will be setting up base in the newly renovated Battersea Power Station, Google’s UK headquarters operate in King’s Cross, Facebook and Instagram reside in upmarket Fitzrovia, and Twitter can be found in trendy Soho. And now Snap, the parent company of mega app Snapchat, has announced that it’s moving its international headquarters to Fitzrovia – setting up camp astride two if its main tech rivals.
All this, of course, is a boon to London in a post-Brexit landscape. While negotiations are ongoing (and very slow-moving), the positive steps being taken by major tech companies to expand their operations in London is a positive sign.
And not just for the capital’s economy – it’s predicted that house prices will rise significantly in Fitzrovia, King’s Cross and Soho, mirroring the way local housing markets grew in Cambridge, Oxford and Reading after the influx of major tech firms setting up headquarters there. In just five years, property prices increased in value by up to 60% in these areas and their surrounds.
With tech giants ramping up their investment in the UK and opting to base their international headquarters in London, average rental prices in already exclusive parts of the capital are expected to get greater still. In the second quarter of 2017, rents in Fitzrovia, Bloomsbury and Soho averaged £659 per week for flats and £1,025 per week for houses.
Meanwhile, the average price of a flat in these same locations is now up by 52% on where it stood five years ago, with buyers shelling out £534 more per square foot.
While Battersea – where 2,000 of Apple’s staff will be based – has an overflow of new properties, a relative shortage of homes exists in Fitzrovia, Bloomsbury and Soho. Consequently, rent rises might be squeezed in Battersea as supply keeps up better with demand, whereas this is not the case in London’s other tech hotspots.
The upward shift is most noticeable in King’s Cross, which has undergone significant regeneration in recent years to become one of the capital’s most sought-after destinations – whether it be for office space, restaurants, cultural venues or homes.
Compared to five years ago, average flat prices in this area are now 48% higher, with buyers asked to pay £311 more per square foot. What’s more, 53.7% of properties sold in King’s Cross in the second quarter of 2017 sold within three months, which compares favourably with the 24.5% for central London as a whole.
So, even though much of the media coverage of Brexit currently veers towards the negative, there are some reasons to feel optimistic – especially for property sellers and landlords in the above locations.
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