Catch the house price wave south of the Thames in ‘new London’

21 February 2015, The Daily Telegraph

Thirty years ago, there was no contest. Ask people which side of the Thames it was better to live on, and the answer would be north every time.

You only needed to look at the Underground map. Barely 30 Tube stations south of the river, compared with 200-plus on the north bank.

Why? Firstly, blame the geology. It was easier to tunnel through the solid clay of north London, than through some of the wetter, more gravel-like soil on the south of the river.

And then there was money. The firms that were building London Underground lines in the 1920s and 1930s were all private companies. The way they maximised their profits was by opening up stations in parts of London that were hitherto uncatered for.

“They preferred to build new lines into areas not previously well served by transport links, rather than areas already served by local mainline railways or tramway networks, as was the case in south London,” says Candice Jones, marketing manager at the London Transport Museum.

This was all very well until 1952, when trams were discontinued. Then, 10 years later, the last trolleybuses were shunted onto the hard shoulder of history.

All of a sudden, travelling into the centre of town became a lot harder for anyone in south London.

North of the river, your average Central Line passenger could get on at West Ruislip and read the paper all the way to Oxford Circus, as could the District Line ticketholder from Upminster to Mansion House.

By contrast, commuters from Surbiton, Croydon and Sidcup had first to take a British Rail train into a central London terminus, and then fight their way onto a Tube to get to work.

And that, so Londoners thought, was the way it was destined to be, which is why the past 20 years have come as something of a shock. For the riverbank south of the Thames has been transformed, from gap-toothed wharfside wasteland into a line of gleaming apartments stretching all the way from Wandsworth to Woolwich.

Forget Fagin and the Artful Dodger; Thames-side residents these days are no longer ragamuffins and pickpockets, but high earners who can pay anything from £500,000 up to £50 million for a river-view home.

This hasn’t happened by accident. Roots of the south-of-the-river renaissance lie in the building of Canary Wharf and the opening of the Jubilee Line, then the Docklands Light Railway.

More recently, too, there has been the creation of the London Overground. This means that in the space of a few minutes, you can make what would previously have been a nightmare journey from Peckham Rye, in the south, to Highbury and Islington, in the north.

The biggest south-of-the-Thames hotspot at the moment is the Nine Elms area, which covers the mile-and-a-half-long stretch of river between Vauxhall and Battersea.

There are about 30 building projects taking place here, covering 480 acres, all due to be linked by parkland. The most newsworthy building is, of course, the new American Embassy, which is moving here from Mayfair. And it will have plenty of other buildings to keep it company.

These include the old Battersea Power station site (3,800 homes), Nine Elms Point (573 flats), One Nine Elms (436 flats), Embassy Gardens (1,900 homes), Nine Elms Parkside Royal (436 homes), plus Vauxhall Cross Towers (291 homes).

And rather than having to cram their way onto already packed trains into Waterloo, residents will be able to hop straight on to the Tube, since two new Northern Line stations are being built at Battersea and Nine Elms (opening in 2020). The cost of these stations (£1 billion) will be met not by the taxpayer, but by the developers building the apartments (the Battersea Power Station Development Company alone is contributing £200  million).

Further good news, given the Northern Line’s propensity for technical problems, is the fact that more money is being put into improved signalling. This should result in a 20 per cent increase (11,000 people) in the number of Northern Line passengers who can pass through central London during peak rush hour.

Yes, this part of town may have lagged behind in the past, but now the brakes are well and truly off. On top of which, New Covent Garden Market is to be redesigned, and in the process is predicted to become south-west London’s answer to fashionable Borough Market.

“This part of town is set to move forward a century in a matter of a few years,” says Mayor Boris Johnson. “It will support 24,000 new jobs, 18,000 new homes, and will cut journey times for passengers.”

And given that London’s population is expected to reach 10 million by 2030, plans are even now being laid for a £3 billion extension to the Bakerloo Line, taking passengers beyond Elephant and Castle, to New Cross, Lewisham, Bromley and Hayes.

As well as constituting a rebirth for the broader south London area, the new plans also mark the upward-mobilisation of the river. Instead of being seen as synonymous with mud and rats, the Thames is now being promoted as an attraction, providing uninterrupted, panoramic views.

“The top 10 cities in the world for global property, in terms of where to live and invest, are all located either on the banks of a major river, on the harbour front or by the ocean,” says Sophie Chick, from the research team at Savills.

“London is one of those premier world cities. The others are Hong Kong, Moscow, Mumbai, New York, Paris, Shanghai, Singapore, Sydney and Tokyo.”

An even bigger bonus is that the Thames follows a pleasingly circuitous route, enabling some residents to see both up and downstream.

“In the west of London, the river bends quite obliquely, and you get terrific views both of the Shard and the London Eye, and back down the river westwards,” says Mark Dorman, head of residential development at estate agents Strutt and Parker.

The best part is that if you live right on the river there’s nothing blocking your view. Mind you, it’s by no means just in the west of town that the river’s renaissance is happening.

As well as the Globe Theatre and the Tate Modern, east London has also seen a huge amount of new development, backed up by improved transport links (first the Jubilee Line, then the Docklands Light Railway). Initially, this development was from Tower Bridge to Canary Wharf and the O2 Dome, but it now stretches much further.

Indeed, when Crossrail opens in 2018, you will be able to get from Canary Wharf to Liverpool Street in six minutes, Bond Street in 13 minutes, and Paddington in just 16 minutes. Effectively, then, east London is no longer a public transport outpost. As a result, the developers have moved in and bought up once-disregarded tracts of land.

“Along the riverfront from the eastern end of Greenwich, and around the Greenwich peninsula, there are still a lot of mouldering wharves and industrial sites,” says Rod Cullen, associate director of sales at Chestertons estate agents. “The developers can’t put up new blocks fast enough.”

Fact: House prices along the South Bank, inbetween new development schemes, rose 8.7pc in 2014, with Chelsea seeing price falls of 1.6pc and Fulham 0.7pc.

Plans are afoot, too, for housing developments to be built as far eastwards as Gillingham, in Kent. Here, a 20-acre site is being turned into Victory Pier, complete with shops, restaurants, art centre and apartments starting at £152,000.

The other big bonus is that a river view is a whole lot more affordable in the east.

“For years, the chance to own a balcony overlooking the Thames was the preserve of the wealthy in west and central London,” says Antony Crovella, marketing director at United House Developments, the firm that has converted a former marine boiler factory into the 257-unit Paynes and Borthwick development in Greenwich (asking prices £480,000-£950,000).

“Now, though, sites in the south-east of London are providing a more affordable way to achieve this.”

These days, it’s not just a question of building flats and then moving on. Developers have learnt from some of the earlier south-of-the-river developments, which have a rather lonely, Marie-Celeste-cum-wind-tunnel feel to them.

“Developers have realised that, in order to make their scheme a success, they have to build not just flats, but a whole new community,” says Camilla Dell of buying agency Black Brick. “It needs to be made up of offices, parks, new transport links, restaurants and shops.”

This is something Jacob Sullivan, head of sales for Berkeley Homes South East, is keenly aware of. His firm is currently turning South Quay Plaza, next to Canary Wharf, into a more human-friendly, 900-home environment.

“The whole point is to buy a site that we can transform into a proper place,” he says. “Not just with lounges and terraces for the residents of the development, but, for example, with swimming pools and gyms and underground parking.”

And don’t overlook shops, restaurants, cafés and views. That’s the aim of George Kyriacou. Brought up in nearby Lambeth, Kyriacou is now managing director of CIT, the firm that is turning the former IPC Magazines building, at Southwark, from offices into a 41-floor, 170-plus-apartment residential scheme.

“The great thing about the south bank of the Thames, is that there are now wonderful views across to the buildings on the north side,” says Kyriacou.

By the same token, too, there is more for north Londoners to look at across the river, given the number of south London developments now reaching skywards.

Certainly, it’s south of the river where the boom is happening, with some 8,500 apartments being constructed. This compares with some 500 apartments that are being developed on the north side, between Battersea and Blackfriars.

The two biggest north-bank schemes are the Riverwalk development just east of Vauxhall Bridge (116 apartments, from £1.75 million, being built by Ronson Capital Partners), and the 50-storey Principal Tower scheme, designed by Foster and Partners, on a site close to Liverpool Street Station.

No question about it, then, Thames-side living is now in fashion, and prices are rising almost as quickly as the new, riverside blocks.

“Even houseboats with moorings at Wandsworth Park sell for £500,000 up to £2 million,” says Chris Firth, director of sales for Chestertons estate agents.And that’s for homes that don’t have any firm foundations, but float on top of water.

“It didn’t used to be the case, but because of all the changes, now it’s true,” says Kyriacou. “These days, the south bank of the Thames is no longer second best. It’s a prime residential area.”

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