Individual borough data for the 1st Quarter 2011 reflects the dichotomy in the market which we have highlighted in previous Residential Reviews, with niche development in the central area and more extensive schemes in the central London fringes . Taken together there were 1,127 starts across the seven boroughs, representing 22% of the overall London total.

Indeed, if we look more closely at individual schemes within our market boundaries, a considerably smaller territory than the whole boroughs indicated in Table 3, the level of starts in the first half of 2011 was really quite low. Only 19 schemes in excess of 5 private units commenced in the first half, with a total of 498 private units, including both schemes built-to-rent and built-for-sale. Only four schemes offer in excess of 50 units, while 11 of the schemes contained less than 10 units, predominantly in refurbishment schemes, usually as a result of change of use from offices. Indeed, almost all the sites listed were formally in commercial uses, either office, industrial or warehouse. In our view the market, in its current state and projected prospects, can easily absorb this level of construction activity of private units to rent and for sale.

Sales rates and prices have hit new highs for schemes under construction. At Marconi House, Strand, WC2, Frogmore and Galliard, which acquired the residential element of a hotel site which had halted during construction after a receivership, succeeded in selling 61 of 79 units in the Far East at prices between £1,500 and £1,600 per sq ft. Unit prices ranged from £550,000 to £745,000 for studios; £840,000 to £1,195,000 for one-bedroom flats; £1.4 million to £2.25 million for two-bedroom flats; and £2.9 million to £4 million for three-bedroom flats. Due to complete in September 2012 this scheme has set a new benchmark for Midtown prices while still offering value compared to other West End locations.

In Midtown’s northern fringe, British Land started construction early in 2011 on the last major phase of its Regent’s Place scheme. North East Quadrant (NEQ), Regent’s Place, NW1, on the corner of Hampstead Road and Drummond Street in the shadow of the Euston Tower, achieved permission in 2008 for three buildings: a 16-storey 500,000 sq ft gross office building with 38,650 sq ft gross retail and community use; a 26-storey private residential tower, designed by Munkenbeck & Marshall, with 101 apartments ranging in size from studios to three-bedrooms; and an eight storey block with 60 social-rented and 10 shared-equity flats. At an overseas launch in March 2011 the first release achieved prices of £1,200 to £1,300 per sq ft, well in excess of typical values for this part of NW1.