LONDON PROPERTY INVESTMENT:
5 Areas WORTH WATCHING
Despite short-term Brexit uncertainty, London continues to attract billions of international investment and there are many reasons to be optimistic of long-term growth. Norway’s sovereign wealth fund, which already has significant property holdings in London, demonstrated its confidence in the market by recently announcing it will increase its UK investments. Earlier this year, Forbes ranked the UK first worldwide for ease of doing business, citing London’s banking and legal sectors as key factors.
Prime central London property has long been a safe haven for international investors but it is worth looking further afield at areas with excellent growth prospects. London’s population is set to increase to over 9.5m by 2026 and the city is undergoing a development boom and expanding in every direction. Projects like the £17bn Crossrail line will slash journey times to areas previously considered more remote. Investors looking for a balance of yield and appreciation can find opportunities in areas outside of central London which will benefit from major infrastructure and regeneration projects.
We’ve put together 5 areas worth consideration for long-term investors and home buyers alike
1. King’s Cross
The most central and expensive area on our list. The area has always been exceptionally well connected with one of London’s busiest tube stations and the Eurostar connecting the area to Europe. For decades King’s Cross had a mixed reputation due to crime and derelict land but is now undergoing huge change with over £3bn of investment in mixed use schemes. Wasteland areas are being transformed into first class public realm and schemes like Gasholders and Coals Drop Yard have recently launched. Major US tech firms such as Google (£1bn) and Facebook have establishing major European HQs in the area and many others have followed.
Investor Tip: Tread carefully with prime property in King’s Cross where prices have already undergone a major uplift and make less sense. Instead, consider generously sized apartments in well maintained post-war residential blocks. Typically these blocks have the council as the freeholder and offer far better value to both home buyers and investors whilst still benefiting from the surrounding regeneration. Read more about buying freeholds and leaseholds here.
Home to the London 2012 Olympics, Stratford is now undergoing a second wave of major regeneration. It is one of the few London areas where planning policy encourages skyscrapers. This is leading to an exciting and modern neighbourhood with a different feel to central London.
The area is already well served by the Jubliee line giving easy access to Canary Wharf and Crossrail will connect Stratford to Liverpool Street in seven minutes.
The V&A Museum will be opening a new branch in the area and University College London are planning a new campus. Major government relocations of of HMRC and The Financial Conduct Authority will bring even more jobs to the area.
Investor Tip: Not all new builds in Stratford are equal. The quality of residential towers and their lease terms varies. It is imperative to do due diligence on a new development before making an offer. We’d advise buyers avoid off plan in Stratford and focus on recently completed developments of which there is a lot of stock available. Read more about London’s off plan market and how you can take advantage of it as a buyer here.
3. Canada Water
Just one stop before Canary Wharf on the Jubliee Line, Canada Water has long been a quiet area with lots of vacant land but that is set to change.
The team behind the redevelopment of Kings Cross are now turning their attention to Canada Water or ‘Docklands’. An ambitious masterplan is looking to build 3,000 new homes, a brand new high street and 2m sq ft of office space creating 20,000 jobs.
Investor Tip: Review British Land’s planning documents for the area which are available to the public. Many of these developments will take years to compete so those wanting to get in now should focus on properties in the immediate periphery of the masterplan.
The only West London entry on our list. Ealing has always been popular with families due to its excellent schools and quintessential suburban neighbourhoods. The area is already well connected with several tube stations but Crossrail is set to be a game changer for the area. Ealing will be served by two Crossrail stops making the area better connected to many areas than its more expensive West London counterparts like Chiswick and Fulham. It will only take 13 minutes to travel from Ealing Broadway to Tottenham Court Road.
Investor Tip: One beds in period properties within walking distance of Ealing Broadway can still be purchased for under £450,000. Before making an offer on a property, check the school boundaries. Regardless of whether you need a school nearby it may affect the future sale price of a property.
The cheapest of the 5 areas.
Tottenham has been identified by central government as an area with high growth potential and is attracting over £1bn in inward investment. Tottenham Hotspur’s new state of the art football stadium will complete later this year and will also host NFL games.
The £1bn High Road West regeneration scheme will provide new green space, sporting and leisure facilities. By 2025, 10,000 new homes and 5,000 jobs will be created as part of multiple regeneration projects.
In the longer term, Tottenham Hale will be on the Crossrail 2 route, dramatically cutting journey times.
Investor Tip: Whilst London rental yields are generally modest, Tottenham has some of the best yields in the city for those looking for a higher than average returns. The area does still have some crime issues and it is worth reviewing crime data to get a better understanding of which areas to avoid.
*All Zoopla prices taken on March 19th, 2019 and are only indicative of recent sold prices
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