US financial institutions, flocking to London have contributed towards the strong rise in both sales and rentals in the City and Docklands according to Hurford Salvi Carr, a specialist estate agent covering the City, Docklands and the West End. In its half-year report, Hurford Salvi Carr outlines how sales prices have risen in the past six months by 12 per cent in Docklands and 10 per cent in the City as American banks, hedge funds and accountancy firms identify the benefits of London as a financial hub.

Director of Hurford Salvi Carr, Stephen Hurford comments: “The demand for property in City and Docklands has been exceptionally high for some time. However, we are now finding this is being bolstered by the influx of US financial organisations attracted by the capital’s time zone position, skills base and less stringent financial constraints compared with New York’s Sarbox regulations. These factors are driving high capital markets to London and senior bankers are following suit.”

With US banks State Street, Bear Stearn and accountants KMPG also announcing moves to Canary Wharf, it is expected that an additional 10,000 employees will be seeking a place to live with many opting for a base near their new workplace.

Stephen Hurford states: “These highly paid staff will require high quality, well located residential accommodation, especially in the rental sector. A lot of City workers are aged between 20-35 and as they are coming to London for the first time and have no family ties, renting is often the most suitable form of tenure.”

The report states that rentals in Docklands property and the City are at a 10-year high following a 7 per cent increase in rents since the beginning of 2007. Typical weekly rents for a one bedroom apartment in City and Docklands average at £490 for a two-bedroom apartment and £375 for a one bedroom apartment.

Looking ahead, Hurford Salvi Carr predicts that the growth in the City and Docklands rental market looks set to continue due to the demand for more staff along with a lack of affordable property for sale and competition from an aggressive investor sector. Meanwhile, it expects to see an “air of normality” return to the sales market due to more vendors opting to bring property onto the market and further increases in the base rate with the possibility of it reaching 6 per cent before the end of the 2007.

However Stephen Hurford concludes: “City bonuses are likely to have an impact on the sales market from around November 2007 when high fliers start to be informed of their annual remuneration. In 2005 and 2006 we saw the impact in terms of sales and price growth during the last two months of the year. Given the record level M&A activity and the potential for equity prices to rise further, it is being claimed that 2007 will be another record year for City bonuses, with a knock-on effect in the London City property and Docklands residential markets.”

For further information contact:
Stephen Hurford
Hurford Salvi Carr,
9 Branch Road, Limehouse Basin,
London,
E14 9HS

Branch
Telephone 020 7791 7071

Sep 17, 2007