London house prices: are there property bargains to be had in the big city?

The magnetism of living in the capital is losing its power. Is now the time to make your move, asks Melissa York

The magnetism of living in the capital is losing its power. Is now the time to make your move, asks Melissa York

To walk around the streets of central London today is to know what it’s like to be in a zombie apocalypse. Streets empty, shops closed, pubs forlorn, the desertion would have been unthinkable only a year ago.

Like the rest of the country, the city is in national lockdown, but what will it look like when restrictions do finally ease? Blinded by the big city lights, will we happily hand over half of our salaries again to live in shoebox flats with no outside space, or will we decide that there’s more to life than theatre and fine dining?

This isn’t just a London problem. In New York, 300,000 residents have fled, many of them to warmer, low-tax states, reports the US Postal Service. The same number could leave our global metropolis, according to PwC’s latest economic outlook paper. It would be the first time that London’s population has fallen since 1988.

And that’s a conservative estimate: a survey by the London Assembly carried out in August — as in, two lockdowns ago — found that 4.5 per cent of Londoners, or 416,000 people, said they would definitely move out of the city within the next 12 months.

Many already have. The number of homeowners buying outside of London hit a four-year high in December, despite the housing market being closed for nearly two months, according to data from estate agency Hamptons International.

As a result, there are more homes on sale. London is the only region in the UK that has seen an increase in supply of new properties coming to market.

Even with buyers rushing to get sales through before the stamp duty holiday deadline, in the first two weeks of the year there were 12 per cent more homes to buy in the capital, says property portal Zoopla; nationally, there were 12 per cent fewer.

Most of these are flats, with owners trading up to houses for more space and investors selling off their buy-to-lets in the face of falling rents amid talk of a change to capital gains tax in the upcoming budget.

 

Space is at a premium now, so bargain hunters are much more likely to get a discount on a flat than a house. At the end of last year the price of a flat in prime London fell 1.3 per cent compared with the same period in 2019, but house prices increased 5.7 per cent, according to data analyst LonRes.

Indeed, there was a 6 per cent rise in the amount spent on houses in London’s top postcodes in 2020 compared with 2019: this in contrast to flats, where purchasers spent 15 per cent less.

One buy-to-let investor we spoke to said he recently bought a one-bedroom former council flat built in the 1980s in Archway, north London, for £374,000. The couple he bought it from, fleeing to the suburbs, paid £420,000 for it in 2016.

“I think it’s a combination of wanting to meet the stamp duty-holiday deadline, outward gentrification and people reaching a certain age and wanting that lifestyle change,” he says. “I believe in London.”

Does this mean values are set to go the same way as rents? Are there, in fact, bargains to be bagged in London?

As always, it depends what you are buying and where. Research by Swiss bank UBS suggests that a third of London listings have had their price reduced, up from a quarter in June.

A heatmap using data from PropCast, which looks at the percentage of homes under offer to see where demand is highest, is flooded by an icy blue all along the central boroughs that line the River Thames.

Drill down into individual boroughs and it’s clear that the highest share of reductions are happening centrally, rather than in the outer London villages. Prices are down as much as 23 per cent in Westminster and 14 per cent in Islington, UBS says.

Buyers looking for discounts, or looking to upgrade to a bigger home, would do well to look in areas where demand has fallen the most since January 2020.

In east London, PropCast data highlights the Olympic Park in Stratford (20 per cent fewer homes under offer) and London Fields (10 per cent) as good places to negotiate. King’s Cross (26 per cent), Camden Town (14 per cent) and Holloway (19 per cent) have seen double digit falls in north London.

South of the river, buyers are going cold on Herne Hill (15 per cent) and Stockwell (18 per cent). Out west, Holborn (30 per cent) and West Kensington (15 per cent) have seen a notable drop-off in buyer demand.

Hamptons International figures show that the competition increases the farther out you go. Overall, London homes are only spending three days longer on the market than other homes in Britain on average. But in Zone One homes are languishing for nine days longer; and in Zone Two they are taking more than a month longer to sell, at 34 days.

With fewer international buyers around, UK investors are snapping up homes in prime locations for a relative steal. Camilla Dell, the founder of buying agency Black Brick, says she’s negotiating on a bulk buy of properties inside Battersea Power Station for a UK buyer, who foresees long-term value there.

One overseas client of hers was looking for a modern two-bedroom flat in Belgravia, central London. Dell says she found one in Ebury Square and watched the value tumble from £4.25 million to £3.7 million. She then negotiated during the last lockdown and knocked another £378,000 off the asking price.

What’s more, house prices in inner London are expected to catch up with those in the suburbs eventually. A five-year forecast by estate agency Savills predicts house price growth of 17.5 per cent by 2024 in London’s poshest postcodes, and growth of 18.1 per cent in the suburbs over the same period.

The long-term value of a central London property is apparent from the number of international owners shelling out large sums to property management companies to look after their empty mansions.

One such business, Eccord, says it is being hired, or being asked to pitch for, one super-luxe property a week, often owned by international families prevented from travelling to the UK as a result of border restrictions.

“A Middle Eastern family appointed us to manage their 10,500 sq ft house in Knightsbridge, which they purchased in March 2020 for £35 million, and are now unlikely to visit for another two years,” says founder Jo Eccles.

A portion of international buyers are buying sight-unseen, but the vast majority are still not prepared to spend millions on a property they cannot view in-person, even to avoid the 2 per cent foreign buyer stamp duty surcharge coming in in April.

Although 300,000 existing Londoners are expected to leave, the same number of British Overseas passport holders in Hong Kong are expected to apply for fast-track British citizenship. Many of these people will be professionals — business-minded — and they will want to live in London.

Investment advisory London Central Portfolio says there has been a 41 per cent increase in traffic from Hong Kong to its website in the past six months and almost 60 per cent of its buyers from the region are looking for a home rather than an investment.

There was similar interest after the British handover of Hong Kong to China in 1997, says Ed Lewis, head of London residential development at estate agency Savills. “What’s distinctive at the moment is that they’re thinking about where they would like to live and the wellbeing of their family.”

With this in mind they are looking at two and three-bedroom apartments, with average budgets around £700,000, says Lewis, putting them firmly in competitive London village territory.

There is increasing evidence that, in the end, this won’t be seen as a flight from the city, but a race to the suburbs. “If you’re a professional that has a budget between £600,000 to £700,000, then I can see how the thought of selling up and having a three- or four-bedroom house outside the city appeals,” says Dell, from Black Brick. “But you make that move at your peril. Will we all be working from home in five years? I doubt it. And once you’re out, it’s a lot harder to get back in.”

Dell says she senses that more homes will come on to the market once the vaccines work their magic because people are put off by restrictive viewings and a less-than ideal sellers’ market.

Even if working from home becomes the norm, the textiles factories of Shoreditch, now some of the city’s most sought-after homes, are testament to London’s rich history of turning commercial space into residential.

“I think people will be desperate to live in the centre again. Every time there has been a partial unlocking, you can’t get a restaurant booking for love nor money,” says Lewis from Savills.” Once this is over, people will remember how cool London is.”

Another overlooked demographic are the millennials and Gen Z, who have been working from home and quietly adding to their deposits for almost a year now.

“Twenty-year-olds are not going to want to sit on Zoom calls in their parents’ house in Surrey any longer than they have to,” Weir says. “They will want to get back here as soon as they can. London has constantly reinvented itself and it will do it again.”

Estate agents report busy January, as buyers rush to beat stamp duty holiday deadline

By Joanna Bourke

A number of estate agents have reported a good performance for January, as buyers raced to get deals over the line before the stamp duty holiday deadline.

The stamp duty holiday, which was launched last July to help boost the housing market following the first lockdown, is due to finish at the end of March.

New data from Nationwide today said annual UK house price growth slowed for the first time in six months in January. It slowed to 6.4% last month, from 7.3% in December.

Robert Gardner, Nationwide’s chief economist, said: “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.”

ADVERTISING

But some estate agents recorded a busy January as purchasers look to complete deals before March 31, while one housebuilder said demand looks encouraging from buyers unlikely to meet that deadline.

Chestertons said comparing January 2021 to December 2020, it conducted 21% more viewings, and agreed 18% more sales transactions.

Nick Barnes, head of research at Chestertons, said: “Following a record December, the sales market has maintained momentum throughout January.”

Winkworth, which has 60 branches in London, said 2021 got off to a strong start, with the number of sales agreed in January outperforming the Boris bounce of last January when there was a surge in sales following the decisive outcome of the General Election.

Visits to  Winkworth’s  website last month were up 20% year on year.

Meanwhile housebuilder Crest Nicholson’s boss Peter Truscott recently said the company will be monitoring how demand is when the stamp duty holiday finishes at the end of March. But he added: “The evidence so far is we are still making plenty of reservations for completions that go beyond the stamp duty deadline.”

A number of people have reassessed their housing needs during lockdowns, with some wanting more outdoors space for example.

Camilla Dell, managing partner at agent Black Brick, said the company had its busiest January since it was launched in 2007.

Where to buy in London: the fast-changing areas for home buyers to have on their radar in 2020

10 London areas for home buyers to consider in 2020 – and why

Buyers looking to start the 2020s in a new London home face big decisions, the first being how close to the centre of the capital they need to be. But if the answer is “very”, the options don’t necessarily have to be limited.

Factors such as a history of good price growth — but with room to grow in the future — and regeneration potential are as important as the quality of local housing stock, the range of transport links and local amenities.

As the new decade gets under way Homes & Property shares its tips for London locations which appear to tick all the boxes.

Brentford, west London

One of the capital’s many industrial backwaters getting a much-needed makeover, Brentford is the west London hotspot you can afford.

Thousands of new homes are under construction overlooking the area’s three waterways – the Thames, the River Brent and Grand Union Canal – bringing with them new shops, restaurants and cultural and sporting facilities.

These new homes are augmenting the area’s existing stock of period houses, and although out in Zone 4 Brentford’s transport links are fast – trains to Waterloo station take just over half an hour.

Most local schools hold at least a “good” Ofsted report and Lionel Primary School and Gunnersbury Catholic School (seniors) are both considered “outstanding” by the schools’ watchdog.

The Brentford Project is set to bring 900 new homes, an arts centre and cinema.

Why Brentford is tipped as one to watch in 2020

The smart money gets in early in the regeneration process for maximum uplift. Ballymore launched the first homes at its 12-acre site by the River Brent in September, with “exciting announcements” expected this year on the shops due to move into a rejuvenated high street.

The Brentford Project will eventually include almost 900 homes, plus facilities including a leisure centre, and an arts centre and cinema. Prices start at £442,500 for a one-bedroom flat; two-bedroom flats are priced from £652,000. Visit thebrentfordproject.com.

Ballymore is not alone in scenting potential in this town. Brentford Football Club’s home is getting a new stadium plus new homes, and another 700 or so homes are coming at Brentford Lock West (brentfordlockwest.co.uk) beside the Grand Union Canal.

The pros: proximity to the lovely Syon and Gunnersbury Parks.

The cons: regeneration comes at a price. Boat owners at the moorings at Waterman’s Park have been moved on to make way for a new marina. The High Street is basic and marred by empty shops. Motorway noise from the M4 blights some streets on the north side of Brentford.

Average house prices in Brentford ​— and what there is to buy

Average prices in TW8 have topped the £500,000 barrier, at £511,000 according to Rightmove. Five years ago the average price was just £376,000.

There’s not a huge number of houses in this area, which pushes up prices. A two- to three-bedroom period terrace house will cost around £550,000 to £650,000.

Flats are in plentiful supply and the new homes landing in the area have also pushed average prices upwards. Buyers have a good choice of newish two-bedroom flats – and the odd period conversion – for around £450,000 to £500,000.

More dated purpose-built two-bedroom flats have price tags closer to £300,000.​

Poplar, east London

Makeover: the transformation of ChrispStreet Market is part of the multibillion-pound Poplar regeneration.

Its location just north of Canary Wharf means this former Victorian slum has long been ripe for regeneration.

Now, finally, Call the Midwife country is being reinvented for the 21st century. In the pipeline are some 3,000 flats – in new buildings and revived brutalist landmarks – plus shops, offices and new parks.

There are also a few streets of period houses for families in search of a traditional home, while one of the area’s four primary schools gets an “outstanding” report.

For older children, Langdon Park Community School is rated “good”. Poplar is served by several Docklands Light Railway stations, all Zone 2.

Why Poplar is tipped as one to watch in 2020

A hugely symbolic year is in prospect for this ugly duckling of the East End as residents move back into the newly restored Balfron Tower.

The brutalist Sixties landmark designed as social housing by Ernő Goldfinger (of Notting Hill’s Trellick Tower fame), has been rebooted as upscale apartments. One-bedroom flats start at £365,000. Visit balfrontower.co.uk.

The pros: much more affordable than Canary Wharf. Lots of change on the cards. The old-school Chrisp Street Market is in line for a £280 million redevelopment with apartments and a new market, despite existing traders claiming they could be pushed out of the area. As well as stalls, there will be space for one-off events such as live music, ice rinks, vintage fairs and open-air screenings.

Regeneration of the sprawling Aberfeldy Estate, renamed Aberfeldy Village, is well under way, with more than 1,000 homes plus shops, a gym and a linear park, completing by around 2025. The High Street has a reasonable selection of useful shops, and there is green space in the form of Bartlett Park and Poplar Recreation Ground.

The cons: for all the billions of pounds being spent, Poplar is still rough and ready. The architectural Marmite that was the Robin Hood Gardens estate has been lost to redevelopment despite huge opposition to its demolition from leading architects. Critics say locals are hopelessly priced out of all the shiny new apartments springing up.

Average house prices in Poplar ​— and what there is to buy

Poplar shares a postcode with Canary Wharf and the Isle of Dogs, and the average price in E14 is £512,000 up a respectable 15 per cent in the past five years.

In Poplar a budget of £500,000 will buy a one-bedroom flat at Orchard Wharf by Galliard Homes, with the added benefit of a communal roof terrace with amazing views.

You could equally buy a more dated two-bedroom purpose-built flat, or a two- to three-bedroom period terrace house – although the challenge here will be finding one.

Woolwich, south-east London

Berkeley Homes’ multibillion-pound regeneration of the Woolwich Arsenal features 5,000 new homes (Daniel Lynch).

 

Five miles down the Thames from Canary Wharf, Woolwich is shaping up as a real alternative, with Berkeley Homes’ multibillion-pound regeneration of the Woolwich Arsenal, featuring 5,000 new homes plus bars and restaurants revamping the waterfront, and Crossrail due to upgrade transport links in 2021.

Down the line, British Land is planning a five-acre mixed development on inland Woolwich’s grotty high street, while Greenwich council has pledged £40 million to repurpose a series of historic buildings on the waterfront into arts and cultural venues.

A former ammunitions factory will become a performance venue with seating for more than 4,000 people.

Transport is provided by DLR (Zone 4), and schools include the Ofsted “outstanding” St Peter’s Catholic Primary School and Cardwell Primary School.

Why Woolwich is tipped as one to watch in 2020

Of all London’s regeneration zones, CBRE tips Woolwich to enjoy the biggest “regeneration house price growth premium” – 7.6 per cent per year.

The pros: the river. Plenty of green space, in the shape of Oxleas Wood and Plumstead Common.

The cons: Woolwich’s waterfront flats are expensive, and the streets of period homes further inland have a rather bedraggled air. Local council estates are downright scruffy.

Average house prices in Woolwich ​— and what there is to buy

An average home in SE18 costs £481,000, according to Rightmove, up from £272,000 five years ago – a massive 77 per cent.

These average figures hide a massive range of homes. Berkeley Homes is currently selling a splendid two-bedroom duplex at Royal Arsenal Riverside for £1.3 million. But you can buy a two-bedroom flat at the site from £600,000.

In the town centre you could pick up a four-bedroom period house for between around £550,000 and £600,000.

Prices for apartments drop the further from the river you move. A two-bedroom flat would cost between around £350,000 and £400,000, or less for ex-local authority property.

Bayswater, west London

Whiteleys shopping centre is being redesigned with new shops and restaurants, along with luxury new homes.

 

Historically, Bayswater has been the shabbiest but also the least expensive of the neighbourhoods encircling Hyde Park.

Its shops may lack excitement but its Zone 1 location is brilliant, its unconverted townhouses are elegant and, most importantly, regeneration is gathering pace.

You can walk to the West End or hop on the Central line at Queensway station or the District and Circle from Bayswater. From 2021 a short walk to Paddington will be rewarded by Crossrail services direct to the City or Canary Wharf.

“With its neighbour Notting Hill to the west and Marylebone to the east, where values can easily exceed £3,000 per square foot, Bayswater has long been the forgotten area of prime central London,” says buying agent Caspar Harvard-Walls, partner at Black Brick.

The reason for Bayswater’s Cinderella status? “Bayswater is blighted by Queensway, which is dominated by fast-food takeaways and mobile phone shops.”

Why Bayswater is tipped as one to watch in 2020

The clean-up of Bayswater is already clear. The first homes at the landmark Grade II-listed former Whiteleys shopping centre, which closed in 2018, go on sale this year. Prices are still to be confirmed and if you need to ask, you probably can’t afford one.

There will also be shops and restaurants at the redesigned centre, rebooted by starchitect Norman Foster. Meanwhile, a cluster of smaller developments on and around Queensway will have more flats, shops and offices  that will generally smarten up the street.

The pros: Bayswater is relatively underpriced for its prime location, and Crossrail and regeneration will produce price growth.

“We know the effect that improving the public realm has on property values,” says Harvard-Walls. “The redevelopment of Marylebone High Street, Mount Street in Mayfair and Sloane Square in Chelsea have led to surges in the price per square foot in those areas. We expect 2020 to be the year the wider market really starts to sit up and take notice of Bayswater.”

The cons: it is good value for prime London, but it’s still not cheap. And there are still too many shabby two-star hotels.

Average house prices in Bayswater ​— and what there is to buy

An average home in W2 costs £1.25 million, according to Rightmove. Unlike other prime districts, where prices have flopped 20 per cent in the past two years, values are up slightly, from £1.2 million five years ago.

White stucco townhouses, often divided into flats, could again become the area’s loveliest homes, priced at £1,500 to £1,600 per square foot for a modernised property.

Prices for newer purpose-built flats are considerably more affordable at about £1,000 per square foot.

Goodmayes, on the fringes of London and Essex

Game-changer: Weston Homes is planning a major development of almost 1,300 new homes.

 

Right on the fringes of London and Essex, Goodmayes has got a quiet and leafy suburban feel and the kind of quality Edwardian housing which would be totally unaffordable if it was a little closer to central London.

Nobody could claim it is a chichi urban village, but this multicultural neighbourhood has both transport improvements and big investment on the horizon, making it one to watch.

It’s already a good option for people working in the City because of its 23-minute rail links to Liverpool Street, with the annual cost for a season ticket £1,400.

Goodmayes Primary School and Mayespark Primary School are rated “good” by Ofsted. For seniors the closest option is Chadwell Heath Academy, which has an “outstanding” Ofsted report and excellent GCSE results, even though half its pupils don’t have English as their first language.

Why Goodmayes is tipped as one to watch in 2020

Goodmayes will be on the Crossrail line, with direct services to the West End and west London on the cards in 2021.

Weston Homes is planning a major development of almost 1,300 new homes on a site currently occupied by a Tesco superstore, of which a third will be affordable and aimed at first-time buyers. There will also be a new primary school, shops and cafes, and landscaped grounds. A decision on the planning application is expected this year and could be a game changer for the area.

The pros: lots of bang for your property buck. Goodmayes Park has got a lake, basketball and tennis courts.

The cons: there’s nothing really wrong with it, but Goodmayes lacks a heart: traffic-clogged Goodmayes Road, while perfectly serviceable as an everyday high street, doesn’t provide one.

Average house prices in Goodmayes ​— and what there is to buy

Average prices in RM6 stand at £364,000, up from £263,000 five years ago – an increase of almost 40 per cent.

As yet there aren’t many flats in the area but it is a good hunting ground for houses. A four-bedroom terrace house would cost anywhere between £650,000 to £800,000.

A three-bedroom Thirties semi would cost around £400,000 to 450,000.

Blackhorse Road, north-east London

Blackhorse Road has good Zone 3 transport links, with the Victoria line and London Overground (Alamy Stock Photo).

Waltham Forest is one of London’s best-performing boroughs of the past 10 years, and this unassuming swathe of workers’ cottages, old factories and workshops is starting to emerge as a real alternative to trendy Walthamstow.

The council’s masterplan for Blackhorse Road is not only to oversee the creation of 2,500 new homes – developers are rushing to invest – but also to attract a new generation of makers, designers, artists and start-up entrepreneurs to breathe life into the area. To this end, the authority is insisting that new developments include workspaces and studios.

Blackhorse Road already possesses good Zone 3 transport links, with the Victoria line and London Overground. Schools include Hillyfield Primary Academy and St Patrick’s Primary Academy, which both hold “good” Ofsted reports, and Eden Girls’ School Waltham Forest (seniors), rated “outstanding” by the schools watchdog.

Why Blackhorse Road is tipped as one to watch in 2020

Blackhorse Road is changing, swiftly and for the better. Barratt London, London & Quadrant and Transport for London started work last summer on Blackhorse View, with 350 new homes of which half will be affordable and aimed at first-time buyers, plus 17,000sq ft of shops and workspace to a design by RMA Architects.

Design standards are generally looking high across Blackhorse Road: housing associations Catalyst and Swan are using CF Møller, the firm which designed phase two of the Darwin Centre at the Natural History Museum, to build 330 lower-cost homes on the former Webbs Industrial Estate.

The pros: Walthamstow Wetlands, London’s fantastic new nature reserve created around a series of Victorian reservoirs, is just to the west of Blackhorse Road.

The cons: a lack of much to do in terms of shops, bars and restaurants.

Average house prices in Blackhorse Road ​— and what there is to buy

Blackhorse Road is in E17 where average prices stand at £484,000 according to Rightmove, up from £378,000 five years ago.

The streets around Blackhorse Road Tube station are lined with neat terrace houses, originally built for local factory workers. A three-bedroom house would cost £500,000 to £550,000.

At Taylor Wimpey’s Eclipse development (taylorwimpey.co.uk) buyers could opt for a new flat, priced from £329,000 for a studio and with London Help to Buy available.

Mitcham, south London

Mitcham Common is bigger than Hyde Park, offering 460 acres of green space which stretches from the town centre to the edge of Croydon.

 

Pleasant, leafy and – to be brutally honest – rather dull, this outpost of south London is nevertheless a safe option for first-time buyers and families alike.

Its popularity stems from its affordability and good transport links. It is also earmarked for serious investment in new homes and new facilities to replace run-down council estates.

Trains from Zone 3 Mitcham Eastfields and Zone 4 Mitcham Junction will get you to Victoria in around 20 minutes, or Blackfriars in less than half an hour.

Local primary schools get an almost clean sweep of “good” reports from Ofsted, and there is a very large choice. For seniors, Harris Academy Morden is considered “outstanding” by the schools watchdog.

Why Mitcham is tipped as one to watch in 2020

Housing association Clarion is leading the £1.3 billion regeneration of three shabby post-war former council estates in the area, providing 2,800 new homes for council tenants, shared owners, renters and for private sale. There will also be new shops, leisure facilities and open spaces

The pros: the 460-acre Mitcham Common is bigger than Hyde Park.

The cons: the town centre is a boring backwater badly in need of investment. Merton council is actively seeking a developer to breathe new life into it.

Average house prices in Mitcham ​— and what there is to buy

Buyers are moving to Mitcham from more expensive areas including Streatham and Tooting. The average price in CR4 is £394,000, up from £281,000 five years ago according to Rightmove, a paper profit of well over £110,000.

For families a three- to four-bedroom terrace house, either Thirties or Victorian and in good condition, would cost £500,000 to £650,000. The closer to Peckham the higher the price.

There are also maisonettes priced £300,000 to £350,000 for a two-bedroom property.

At Redrow’s Millfields development (redrow.co.uk) fans of new homes could pick up a three-bedroom townhouse by the River Wandle and set in landscaped gardens, from £580,000. London Help to Buy is available.

London house prices: asking prices dip despite low supply as sellers hold putting their homes on the market until after the General Election

Listings of London homes for sale plummet as the nation waits to see who’ll be in power after December 12th

By Ruth Bloomfield

Londoners thinking of selling their homes appear to be postponing their decision until after the result is known of the General Election on December 12.

The number of homes put on sale during this month is down by a resounding 26.9 per cent compared to new listings in November last year, research by Rightmove shows.

Rightmove blames a powerful triple-whammy of political uncertainty, Brexit and the traditional seasonal slowdown.

”Our monthly poll of the housing market shows a clear swing towards hesitation for prospective sellers, with buyers losing the extra choice that thousands more newly marketed properties would bring,” says Miles Shipside, Rightmove’s housing market analyst.

Sales numbers are also falling – although only slightly, as London buyers take advantage of asking prices down by 1.4 per cent – or £8,926 – in the last month. Across the UK asking prices fell 1.3 per cent in the same period and are unlikely to revive until the New Year at least.

“Near-term uncertainty will exacerbate the traditional lull in activity in the run-up to Christmas,” predicts buying agent Camilla Dell, managing director of buying agents Black Brick.

“This lull can present an ideal opportunity for buyers to strike. With only seven weeks to go before Christmas, vendors can become desperate to close a deal, and other buyers may be distracted with their festive preparations. Our view is that this can be the best moment to strike.”

Walter Mythen, a director at estate agents JOHNS&CO, agrees. “There has never been a better time to negotiate a good deal,” he says. “Within reason, many developers and individual sellers are open to fair offers so it’s always worth asking.”

Rightmove’s November house price index found that the average property in the capital now has a price tag of £609,506. The asking price for a home in Zone 1 stands at just over £1.3 million, but you could pick up a home in Zone 4, 5, or 6 for between £465,000 and £488,000.

The best-performing individual boroughs over the past year have been in east London, led by Tower Hamlets, with asking prices up 3.5 per cent to an average of £592,000. Homes in Waltham Forest, Bexley, Hackney, and Havering also saw modest annual price growth, along with those in Southwark and Sutton.

But two thirds of the capital’s boroughs have seen prices decline in the past 12 months, led by three leafy south-west London boroughs: Richmond upon Thames (down 6.1 per cent), Kingston upon Thames (down 5.9 per cent), and Wandsworth (down 4.5 per cent).

In the longer term, Savills’ influential five-year house price forecasts, published this week, suggest that average prices in London will increase by four per cent by 2024, while prices in the South-East will leap by 10.9 per cent.

It believes that prime central London will lead the recovery, with price growth of 20.5 per cent over the next five years, cancelling out the misery of similar price drops experienced since 2014.

Most likely to: East London’s Zone 1 Crossrail hotspot where house prices are still rising

The launch of the Elizabeth line will speed this Zone 1 neighbourhood named “most likely to outperform” from edgy to sought after.

By Ruth Bloomfield

Of all central London areas getting a Crossrail station, Whitechapel is the most likely to outperform in terms of property prices in the next five years, according to exclusive new research for Homes & Property.

And 2018 is shaping up to be a turning point for this vibrant, multicultural East End neighbourhood, best known for its dramatic Victorian history of slums, serial killings, freak shows and Fagin.

This autumn the capital’s largest photography gallery, Fotografiska London — an offshoot of the popular Stockholm gallery — will open a new 89,000sq ft facility close to the Whitechapel Gallery, with seven exhibition spaces, a cinema, two restaurants, a café and bar, while in December Whitechapel will become part of the long-awaited Elizabeth line, giving it swift links to the West End, City and Heathrow airport.

“A lot of other areas along the Crossrail line have already been developed,” says Tom Kain, a buying consultant at Black Brick property agency.

“Whitechapel is relatively underdeveloped. We are starting to see new buildings with concierge, gyms, and ground-floor shopping arcades. There is no doubt that the environment is changing. If I was a betting man I would say that there are investment opportunities there.”

Whitechapel is currently by far the most affordable central London area to get a Crossrail station and on that basis it’s a go-to option for buyers seeking a Zone 1 address. Average prices now stand at £470,961, up more than 50 per cent from £312,409 in 2013, according to Savills.

For buyers in a position to purchase in E1 the rewards could be significant. New research by JLL predicts that, thanks largely to Crossrail, plus some new-homes schemes smashing the price ceiling, prices will increase by 15 per cent between this year and 2022. Growth across central London over the same period is forecast at just under three per cent.

IT’S NO BEAUTY — YET

Whitechapel’s plus points are partly its central location and connectivity, which must be balanced against its grimy streets and distinct lack of green space.

Whitechapel High Street is a messy patchwork of fine old Georgian buildings, ugly Seventies horrors, building sites, raging traffic and discount stores, while a detour down a side street is just as likely to bring you to a fine terrace of period houses as to a frankly threatening council estate.

Tower Hamlets council believes Whitechapel has the potential for 3,500 new homes to be built over the coming years, along with new shops, restaurants, cafés, offices, and schools to serve its new community, whose ranks will be swelled by the intake at a planned £300 million science research campus for Queen Mary University of London.

The first major sign of the changing face of Whitechapel is The Silk District, a £90 million development by L&Q and Mount Anvil named for the silk-weaving Huguenots who adopted this corner of east London during the 17th century.

As well as 564 homes, of which about a quarter will be affordable and earmarked for first-time buyers, there will be space for shops, cafés and restaurants set on pedestrianised streets and squares. The Silk District’s luxury credentials include plenty of residents’ amenities, including a gym, cinema room and private bar.

Prices, by Whitechapel standards, are ceiling-shattering. Currently on sale are studio flats from £465,000, one-bedroom flats from £517,000, and two-bedroom flats from £687,000. The scheme is being marketed in Hong Kong and Kuala Lumpur as well as London in advance of building later this year.

STARCHITECT HOMES

One of the biggest developments on the horizon will wipe away the old Whitechapel Estate, built at the end of the 19th century as part of a slum clearance programme. Intended to provide “model dwellings” for London’s poor, it was altered and extended hastily after the Second World War and gained a reputation for crime and teenage gangs that has lingered.

In February, after a two-and-a-half-year planning battle with Tower Hamlets council, a planning inspector granted permission to flatten the estate and replace it with 12 new buildings of up to 23 storeys that will reach more than 300ft, designed by PLP Architecture and starchitect Sir David Adjaye.

The Whitechapel Estate mark II has been named Whitechapel Square and will have 343 flats. Just over a quarter will be sold to first-time buyers at affordable prices, 168 will be for medical staff and students, and there will also be offices and shops.

A pedestrianised “green spine” of plant- and tree-lined pathways will run through the estate along what is now Philpot Street.

Vibrant, arty multicultural East End: street art in Chance Street, E1, attributed to German-based Claudia Walde or “MadC” (In Pictures via Getty Images)

The reboot of the Whitechapel Estate has inevitably led to talk of gentrification and local people being driven out to make room for luxury flats for affluent City workers and overseas buyers.

Another issue in this area is its clusters of magnificent period buildings and how they will be protected amid regeneration.

CITY WORKERS’ CHOICE

Sainsbury’s hopes to replace its supermarket in Cambridge Heath Road with another major mixed development, including shops, cafés, restaurants, plus almost 500 homes in a series of “mansion blocks” and a 28-storey tower.

Objections to the £200 million plan for Whitechapel Square have centred on the tower’s impact on a nearby Grade I-listed terrace of almshouses designed by Sir Christopher Wren, and it has been rejected twice by Tower Hamlets council.

The supermarket has already agreed to scale down its ambitions: under the current plan the tallest building on site is nine storeys.

But in February Sainsbury’s was thwarted once more over a lack of affordable housing in the modified proposals for 470 flats in eight blocks. An appeal has been lodged and a decision is expected after a hearing in October.

Whatever the result, Black Brick’s Tom Kain sees a smartened-up Whitechapel becoming a hugely popular option for City workers who might previously have preferred a “City-fringes” home in Shoreditch or Spitalfields. “It is going to be fantastically well connected,” he says.

WHAT CAN I BUY IN E1? FROM GEORGIAN TO NEW BUILD

Much of Whitechapel’s period housing was lost in the Blitz but a handful of Georgian terraces survived and are now much better value than similar properties elsewhere in central London, with some split into flats.

For buyers who want to be as close to the action as possible, Keatons estate agents has a large two-bedroom flat of more than 900sq ft in a converted pub in Whitechapel Road, at £650,000.

From £465,000: studio flats and one- and two-bedroom apartments at The Silk District. Whitechapel’s first Crossrail-inspired scheme will also have cafés and bars

The Silk District is Whitechapel’s first major Crossrail-inspired scheme and about two thirds of its homes have sold. A one-bedroom flat, with great views, is on sale with developer Mount Anvil for £589,500.

For between £350,000 and £500,000 you could find a two-bedroom ex-council flat or one in a slightly tired purpose-built block. Or you could spend the same money on a one-bedroom flat in a period conversion or a jazzier development.

A BRIEF HISTORY OF WHITECHAPEL

In the ancient past Whitechapel was a tiny, rural village, a staging post on the way for travellers between London and the Roman town of Colchester in Essex. But its urban story really begins in the 16th century when it developed as an industrial centre to serve the City.

Tanneries, breweries, slaughterhouses and metal foundries were set up and, amid these noxious trades, lived impoverished workers and their families.

This is where the Elephant Man, Joseph Merrick, was exhibited in a shop on the Whitechapel Road before coming to the attention of Dr Frederick Treves who worked across the street at the old Royal London Hospital, where the site is now earmarked for a new town hall for Tower Hamlets.

Picture this: the capital’s largest photography gallery, Fotografiska London, opens this autumn with seven exhibition spaces, a cinema, two restaurants, a café and bar close to Whitechapel Gallery public art centre (Fotografiska London)
It is also where serial killer Jack the Ripper butchered at least five of the area’s many prostitutes during 1888.

Whitechapel was London’s first slum and it is said that Charles Dickens, a regular at the area’s music halls, based Fagin in his novel Oliver Twist on a real-life 19th-century “fence” who operated in the area.

Racial and ethnic tensions have been deep-rooted in a district that has been adopted by waves of immigrants.

In 1936, thousands of poor mainly Jewish protesters converged on Cable Street and used homemade barricades to prevent the jackbooted British Union of Fascists marching, an event now commemorated in a mural in the street.

 

Sealed bids and gazumping return to central London in boost for property market

By Jonathan Prynn

Sealed bids and gazumping have returned to central London in a remarkable spring revival of a market in “deep freeze” for two years.

Buying agents said the number of clients looking for “Brexit bargains” in areas such as Knightsbridge and Canary Wharf had soared by as much as a third in recent weeks.

Interest is most intense in the sub-£1 million bracket where stamp duty rates are lower, but also in the £3 million to £5 million range, with Chinese buyers particularly keen to invest.

Prices in prime central London areas have fallen by an average of 12.5 per cent since they peaked in late 2014, when former chancellor George Osborne increased stamp duty on properties over £1 million, according to agents Savills.

This, combined with a 16 per cent fall in the value of the pound against the dollar since the EU referendum last June, means that the London market is now around 30 per cent cheaper for a foreign buyer — and as much as 50 per cent less expensive for some individual properties.

Trevor Abrahmsohn, managing director of agents Glentree International, said: “We’ve been through a torrid time but Brexit has saved the property market at the higher end. I am delighted to say we have agreed £30 million of sales in the past two weeks. We had a run of seven sales in the £3 million to £5 million range and are now short of stock.”

The recent stability in the pound has also persuaded some investors that it is now “safe” to plough their money back into London bricks and mortar.

Jo Eccles, of buying agent Sourcing Property, said: “The market is definitely picking up across all price brackets. We have been bidding on a family house in Knightsbridge for just under £5 million, there is competition from another buyer and the vendor has this afternoon asked to go to sealed bids.

“We have seen nearly 35 per cent increase in the past three weeks in the number of buying clients we are representing and a 60 per cent increase in serious enquiries from potential buying clients over the past two weeks.”

Camilla Dell, managing partner of agent Black Brick, said: “We are also seeing a return of competitive bidding across the spectrum, particularly on property that is priced correctly in line with the current market.

“We have also seen a return of gazumping. We recently secured a flat in Canary Wharf for a client at £1.48 million. Our initial offer of £1.44 million was accepted but we were gazumped by another buyer who offered £1.5 million. Luckily, we managed to re-agree the sale at the original asking price as our client was a cash buyer.”

Cherie Blair was allegedly gazumped by a British actress after trying to buy a five-bedroom house in Marylebone  for  her daughter. The barrister, 62, is said to have had an offer of £2,765,000 accepted for the Georgian property, only to be outdone by a higher offer from St Trinian’s star Talulah Riley. The actress, 31, who divorced tech billionaire Elon Musk for the second time  last year, reportedly paid £3 million.

Another factor has been the closing of the price gap between central London and the suburbs where there have been double-digit annual rises in prices over the past two years. An example of prime property being snapped up is a five-bedroom townhouse in Highgate that was on the market for £6,950,000 and is now under offer.

Jonathan Hopper, managing director of the buying agents Garrington Property Finders, said: “Prices in the outer boroughs will never catch those in prime London, but the boom in the ’burbs is narrowing the gap with the flagging centre — and making properties of all sizes in desirable postcodes appear better value.”

 

Stamp duty changes: buy-to-let investors competing with first-time buyers creates a ‘mini-bubble’ in the London property market

Mind the gap

The price gap between property in London and the rest of the country has reached its widest point in history — an average home in the capital now costs more than two and a half times the price of a home elsewhere.

The record divide, revealed in data from the Land Registry, shows that a typical London property now costs £463,872 compared with £180,252 across England and Wales.

The phenomenon is explored in a new Channel 4 documentary, Million Pound Properties, which is being shown on Wednesday 15 April at 8pm.

It investigates what a seven-figure budget will buy across different parts of the UK. For example, for £1 million you can snap up a Scottish stately home, or an Islington council house. In Essex, what you pay for a mansion will buy a Thames houseboat in the capital.

Currently on the market with Miller Town & Country is a Grade II-listed, nine-bedroom manor house near Okehampton, Devon, featuring views across Dartmoor and four acres of grounds. It’s yours for £1 million. In London, Chase Apartments is offering a one-bedroom flat in King’s Cross for the same price.

“The simple fact is that London has become an ‘international city state’ and what is going on here bears no resemblance to what is happening in the rest of the country,” says Howard Elston, associate director at Aylesford International.

“If the influx of overseas money into London continues as it has done over the past decade, then the discrepancy will only get bigger and domestic buyers will have to move further out to find something they can afford.”

Home owners leaving London can, technically, profit from the equity their properties have built up. But buying agent Saul Empson of Haringtons UK says that, in reality, London’s stellar price rises mean home owners are reluctant to move.

This, he says, is partly because it costs so much to move and, if you do, you will have no chance of getting back to London if you change your mind.

As a result, owners are holding on to property, reducing the choice for buyers and ramping up prices.

“One of the most common complaints about the London market is the lack of good-quality homes,” says buying agent Caspar Harvard-Walls, a partner at Black Brick.

“Everybody wants to buy here because profits have been so high since 2008, compared to the rest of the UK. If you are one of the lucky people who own in London and have benefited from significant capital growth, why would you sell?

“Increasingly, we see families, who need or want to move out of the capital for more space and better schools, renting out their London home and renting in the country, while using the profit on their rent in London to pay the commuting costs.”

While the property price gap between London and elsewhere is likely to remain large for the foreseeable future, there is evidence that as price rises in the capital become steady, the gulf with the prime home counties will start to narrow.

Bayswater’s £500 million makeover

A mystery Brunei billionaire is investing £500 million into transforming Queensway. The once grand Bayswater throughfare is set to become the Covent Garden of west London, with new apartments, refurbished luxury homes and a retail boulevard. By David Spittles

Bayswater is about to be born again on the back of a £500 million investment in Queensway. According to the mystery Brunei billionaire behind the scheme, this once grand Bayswater thoroughfare, now so shabby, is set to become the Covent Garden of west London.

In a dramatic property raid, the super-rich investor has taken control of 75 per cent of the street’s buildings, including listed Whiteleys shopping centre. The investor plans to create a smart urban estate by taking a leaf out of the book of historic landowners such as the Duke of Westminster.

Bayswater is already reclaiming the residential cachet it enjoyed in Victorian times, when garden squares and imposing stucco terraces were built to fill the acres between Hyde Park and Paddington station. Decline set in during the mid-20th century with the spread of bedsits, seedy B&Bs and tourist hotels, and by the Eighties it had the fastest population turnover in London, a place of “bewildering cosmopolitanism”, according to author Peter Ackroyd.

Even five years ago, Bayswater was definitely the wrong side of the park. Perceptions started to change when former prime minister Tony Blair bought a house in Connaught Square, and small developers bought up run-down property to turn into high-end apartments. Buyers could certainly get much more for their money than in neighbouring Notting Hill or Mayfair.

Bayswater’s new apartments

A new set of apartments, known as The Lancasters, was a game-changer. This redevelopment of a former Thistle Hotel fronting Hyde Park brought 76 sumptuously embellished apartments to the market, with equally grand multi-million pound price tags at up to £3,800 a square foot.

“Bayswater has seen fantastic price growth — more than 30 per cent over the last three years,” says Stephen Fairfax of estate agent Knight Frank. “And there’s more to come. The W2 postcode is a shrewd place to invest.”

Camilla Dell, managing director of Black Brick search agency, says: “I used to suggest Bayswater as a cheaper address for clients who wanted to be close to Notting Hill, but now it is popular in its own right.”

No more low rent

Shrewd hoteliers are selling low-rent backpacker hostels to rich bankers, who are converting them back into wow-factor homes.

Royal Opera House architect Dixon Jones has been hired to draw up a masterplan for unpolished Queensway. It is a challenge. Currently a sea of shabby souvenir shops, bureaux de change and fast-food takeaways, this patch is an architectural hotchpotch, lacking the uniformity of Bayswater’s back streets. The goal is to transform it into a prestige retail boulevard, with Whiteley’s, the jewel in the crown, becoming a rival to Harrods.

Bayswater stretches from Marble Arch to Westbourne Grove, taking in the genteel Hyde Park Estate and fast-changing Paddington, set to become a Crossrail hub.

Upcoming new developments in Bayswater

Ongoing regeneration around the station and canal basin has created a fashionable waterfront complex of designer homes and gleaming corporate offices. Launching in 2014 is a 42-storey skyscraper, part of the Merchant Square canalside scheme. The tower will have apartments above a deluxe hotel on the lower floors and be crowned by a glamorous sky bar, with 360-degree views.

New apartments are coming thick and fast. Former Queens cinema on Bishops Bridge Road is being redeveloped into 16 homes, set behind the splendid original Art Deco façade. New architectural elements include a “Bauhaus” exterior in glazed terracotta panels.

Shops at street level will improve an unloved corner, while a reconfigured traffic system will create a new public space at the junction with Westbourne Grove. Completion is scheduled for 2014.

The fate of the Comfort Inn budget hotel at Craven Hill Gardens is a telltale sign of the way the area is going. It and the adjacent Hempel, a trendy white stucco-fronted boutique hotel, have been acquired by developer Amazon Property for conversion into 12 lateral apartments and three townhouses, to be called The Hempel Collection.

Radiating out from Lancaster Gate, away from Hyde Park, is a web of streets with handsome squares and tucked-away mews. Big lateral flats such as those carved out of the old Football Association headquarters at 17 Lancaster Gate sell for more than £3 million. Here too is Spire House, an eye-catching scheme of modern apartments grafted on to the body and spire of a listed Victorian church.

A mansion-style townhouse on Bathurst Street has been split into six high-ceilinged apartments with marble-walled bathrooms. Prices from £1.7 million.

Blairs and graces

Since the arrival of the Blairs, the neighbourhood around Connaught Square has evolved into a villagey quarter of galleries, boutiques and restaurants with its own security cordon in the form of armed police guarding the ex-prime minister’s home and the connected mews house in Archery Close.

Here too is the Church Commissioner-owned Hyde Park Estate, which mixes post-war homes and affordable tower block flats with period townhouses. A prestige new address is 2 Hyde Park Square, which offers underground parking. Prices start at £2.4 million.

Nearby Connaught Place has seven apartments in a refurbished Georgian building  — while British Land’s redevelopment of 64 Seymour Street has brought 10 smart contemporary-design flats from £1.7 million.

Despite its rising status, Bayswater is still significantly cheaper than neighbouring Marylebone, according to estate agent Kay & Co. Mews houses and mansion block flats are in high demand, costing about £1,200 a square foot and Bayswater is even first-time buyer territory: a one-bedroom flat in listed Westbourne Terrace is on the market for £550,000.

Resist the herd instinct and focus on small developments

The best things come in small packages

By Faith Glasgow

As irresistable as the glossy brochures of large scale housing schemes may be, many home hunters might find a better deal if they focus on smaller, less high-profile developments. One attraction of these more humble projects is their “specialness” offering the chance to buy a “one off” flat, rather than clone of the other 199 apart-ments in the block. Says Peter Rollings, chief executive of estate agent Marsh & Parsons: “Often, smaller developments are effectively conversions, and this mix of traditional and contemporary archi-tecture piques buyers’ interest.” Rollings points to the ongoing nine-unit conversion of a former mill house in Millers Way, Brook Green, west London, where three properties are already under offer. “We expect all will go before a show home is finished, let alone the whole development,” he says. Of course, there are some respects in which grand scale wins out on the life-style front. A strength of many larger developments is that they are able to offer hotel type amenities, such as a residents’ gym, pool or concierge service, which wouldn’t be viable in a smaller scale scheme. “On the flip side, it means that service charges for smaller developments are usually much lower,” Rollings adds.

When it comes to rental investment potential, small scale schemes have some important advantages over major developments. First, they tend to be bought predominantly by owner occupiers rather than landlords. “I’d estimate that the proportion of homeowners in smaller, lower density developments in prime locations is around 70 per cent, compared with high density new build developments where more than 70 per cent of buyers will be investors,” says Camilla Dell, managing partner of buying agency Black Brick Property Solutions. This is because homeowners expect to “fall in love” with a property, including its idiosyncrasies and eccentricities in addition to its well-thought-out design, views and sense of community and they will pick and choose to find the right place. In contrast, says Dell, large-scale developments are marketed as a matter of course to speculative investment buyers in Asia, who buy off-plan and want only to trade or rent out their units, not to live in them. The flats in these schemes tend to be smaller, cheaper, relatively standardised units to appeal to that market.

Served rare there is greater “rarity value” for each unit in a small development, and a much lower risk of several landlords putting their apartments on to the rental market at any one time. “Units in big schemes can usually only compete on price,” says Naomi Heaton, managing director of central London property investment firm LCP. “We occasionally take on rental properties in areas such as Canary Wharf for clients, but we have to discount the rental by about 25-30 per cent [over wider market values].” Moreover, observes Martin Bikhit, managing director of estate agent Kay & Co, timing can be a problem. When a lot of units in a scheme are sold to buy-to-let investors, a rush of similar units typically comes to the rental market at the same time on completion of the development. “This is not an issue in a buoyant market, but in a quieter market a glut of pretty much identical apartments can result in downward pressure on rental prices,” he says.

Heaton also warns that where absentee landlords and itinerant tenants predominate, the building and surroundings may not be so well looked after. “Homeowners tend to set up active residents’ committees to make sure everything is as they want it to be,” she says. Smaller developments, especially those in good locations, also tend to hold their capital value better because of the scarcity factor. Says Marsh & Parsons’ Rollings: “When it comes to reselling, because there’s a small number of properties in the development, few are likely to be marketed simultaneously. That lack of supply strengthens the vendor’s position.” The sheer volume of similar units in a large scale development can dampen resale prices particularly given that such schemes are often part of the wider long term regeneration of a whole district of the capital. Kay & Co’s Bikhit fears that may be a problem when the Olympic Village is turned into a 2,800-unit mixed community of affordable and privately owned housing after the Games.