Where to make Capital Gains

27 September 2014, The Daily Telegraph

 

In the game of snakes and ladders that is the London property market, there is nothing quite as satisfying as being the first person to identify a hot spot. “People buying in central London have become far less postcode-snobbish than they used to be. And they are prepared to look at areas they might once have overlooked, so long as the price is right,” explains Tom Bill, the head of London residential research at Knight Frank. Substantial and continuing changes in the city’s transport infrastructure have also played a pivotal role.

So where should the canny buyer invest? Some areas, such as around the soon-to-be-renovated Battersea Power Station, have obvious investment potential. But the developers know that, so property prices already reflect the expected gains. Other up-and-coming corners of the capital have improved under the radar, so to speak, and may be better long-term bets

Here are 20 capital hot spots where snapping up property in 2014 could just be the best decision you have ever made.

1. Bayswater/ Queensway

Bayswater is “the last piece of the jigsaw around Hyde Park,” says Tom Bill. Prices on the north side of the park have never matched those in Kensington, Mayfair or Knightsbridge, but wealthy overseas investors are starting to buy properties around Queensway. Look out for tired terraces and once-cheap hotels which, with a bit of TLC, could be converted into ultra-cool residences in a prime location.

2. Dalston/ Kingsland

To the old mantra “Location, location, location”, there needs to be added a new one: “Trains, trains, trains”. House prices in Dalston/ Kingsland are up 31 per cent in the past 12 months, according to Hamptons. It’s the area’s proximity to the North London Line – part of ongoing improvements to London Overground – which is believed to be responsible. Equally sharp price rises have been observed near other London Overground stations, such as Brockley and Brondesbury Park.

3. Whitechapel

Could Whitechapel be about to finally shake off the reputational damage caused by Jack the Ripper? Yes, says Lochie Rankin of Lichfields, who calls Whitechapel “the most interesting developing market in east London”. Although prices in the area are tipped to rise by around 25 per cent before Crossrail is completed in 2018, developers have only recently seen Whitechapel’s huge potential. Expect a rash of New York loft-style properties in the next few years.

4. Peckham

The Trotters would probably be appalled, but there is hardly a plonker to be seen in Peckham now – the area is being gentrified so quickly. “When prices shot up in more salubrious parts of London, Peckham was left behind, despite its proximity to the City and fantastic Victorian architecture,” says Gareth James Mozley of GJM. It is making up for lost time now, with prices more than doubling in five years.

5. Holborn/ Aldwych

Holborn used to be viewed more as a corridor between the West End and the City than as a desirable address. Not any more. Cool city apartments or town houses on immaculate residential streets such as Doughty Street cost significantly less than they would in more fashionable parts of central London. You can be confident of showing a healthy profit in the long term.

6. Clerkenwell

“Clerkenwell has seen positive changes in recent years, and I believe the scale of this regeneration will accelerate over the next five to 10 years,” says Camilla Dell of Black Brick. Current property prices in this likeable enclave, popular with creative types, range from £1,000 to £1,400 per sq ft, but experts see no reason why they should not rise to Soho levels of £2,000 per sq ft. Farringdon will be a major beneficiary of the Crossrail project, while the major new development on the Old Street roundabout, known as the White Collar Factory, should be complete in 2016.

7. Nine Elms, Battersea

London property experts are unanimous that, with the regeneration of Battersea Power Station, the US Embassy moving south of the river and the planned Northern Line extension, this area has a bright future. So much smart money has already been pumped into the area that it may be too late to get on the bandwagon, but it is certainly a bandwagon worth careful consideration.

8. Streatham

“This area is a brilliant option for those who can’t afford the more established surrounding areas, such as Balham,” says Robin Chatwin of Savills. “We have seen prices grow by nearly 20 per cent over the past 12 months, but the area still looks amazing value.” The new Streatham Park is helping put the area on the map, while there are excellent transport links to Victoria, as well as some well-regarded schools.

9. Stoke Newington

“Stoke Newington is what Shoreditch was five or six years ago, with a lot of young professionals moving into the area and creating a real buzz,” says Robert Fraser, director of Fraser & Co. Like neighbouring Newington Green, this multicultural pocket of the borough of Hackney is being rapidly gentrified without becoming in any way genteel. It looks an excellent long-term bet.

10. Southwark

t is hard to envisage a day when Thames-side properties fail to attract a premium, and it is mainly developments south of the river which are setting the pace. The latest one, due for completion in 2016, is the Music Box. These 40 modern apartments are perched on top of the London Centre of Contemporary Music in Southwark, which is fast becoming the epicentre of South Bank cool.

11. Bow

No East End Cockney used to be worth his salt unless he had been born within the sound of Bow bells. Not many of Bow’s current residents would pass the Cockney test, but the area’s rich history, and lively ambience, continue to make it attractive. “Bow is proving particularly popular with City types who cannot afford to live in Canary Wharf, but view it as an excellent alternative,” says Robert Fraser, director of Fraser & Co.

12. West Drayton

Another area likely to benefit when Crossrail is completed in 2018, when Bond Street will be just 23 minutes away. “Over the past couple of years, we have seen a huge increase in the number of investors keen to purchase property in the area. They are confident that their investment will achieve a substantial rise in capital value once the Crossrail station opens,” explains Nicholas Jordan, director of the Cameron group. Drayton Garden Village will provide nearly 800 new homes, while Drayton Wharf, on the Grand Union Canal, will offer stylish apartments at affordable prices, starting at £200,000.

13. Brixton/ Kennington

“Thanks to re-rating, the search for property hot spots in London is starting to move outwards, and Brixton and Kennington are among the areas benefiting,” says Ed Mead of Douglas & Gordon. “Brixton is defying convention and is now the area where young people want to live for all right reasons, while the Oval is firmly in the sights of the Bank of Mum and Dad.”

14. Earls Court

Known as Kangaroo Valley in the Seventies, Earl’s Court has never quite overcome a down-at-heel image. But all that could be about to change, says Richard Barber of W A Ellis: “The redevelopment of the Earl’s Court Exhibition Centre and Seagrave Road will have a massive effect. The development will comprise four urban villages and a new primary school, and we will undoubtedly see house price increases off the back of it.”

15. Wapping

“The past 12 months have been fantastic for Wapping, with price growth of 24 per cent compared with seven per cent for Chelsea and Knightsbridge,” says Lauren Ireland of Savills. Wapping is simultaneously steeped in history and thoroughly modern, packed with the kind of riverside warehouse conversions that seem sure to gain in popularity.

16. Victoria

“Victoria has long been seen as a poor relation of neighbouring Belgravia. It’s often called up-and-coming, but has never really arrived,” says Rachel Thompson of the Buying Solution. But better times could be just around the corner, with the £2bn regeneration of Victoria Coach Station and Victoria Street. Ultra-modern glass buildings are slowly replacing the austere architecture of “old” Victoria – often a telltale sign of an area where confidence is booming.

17. Tottenham Court Road

“Historically, this end of Oxford Street has been considered unattractive. But I have no doubt that this perception will change considerably, particularly if the Centre Point building gets redeveloped into high-end residential units,” says Camilla Dell of Black Brick. The Tube station is being completely redeveloped and, with the travel time to Canary Wharf set to be halved, the area can only go from strength to strength.

18. Honor Oak

No sector of the capital has benefited more from improvements in the capital’s infrastructure than the south-east. Honor Oak, in the borough of Lewisham, perfectly illustrates the knock-on effect of good rail links. The area has never had the cachet of Dulwich, but it is catching up fast. With direct trains to London Bridge likely from 2018, courtesy of the Thameslink Project, those competitively priced three-bedroom Victorian terraces at around the £500,000 mark are starting to look like real bargains.

19. Mayfair

Anyone who has ever played Monopoly will have clocked Mayfair as London’s most pukka address, so it may seem odd to call such a bastion of conservatism up-and-coming. But perhaps that way of thinking is out of date, says Tom Bill of Knight Frank. “Mayfair used to be dominated by offices, but we have recently seen a big growth in the residential market, which is likely to bear fruit long term.”

20. Elephant & Castle

Elephant and Castle used to be the kind of scruffy London enclave you drove through without stopping: it was far from easy on the eye and the road layout was a mess. But better times have come to the area, with a significant programme of regeneration (the picture shows Elephant and Castle’s dilapidated Heygate Estate as it is planned to be – an eco-friendly, mixed-use retail space)) . It is also in travel zone one, which is a plus, and property prices remain remarkably reasonable for somewhere so central. It’s not far from the Old Kent Road, which along with Whitechapel, is the last area on the Monopoly board where you can still hope to find a bargain.

 

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