BUY SMALL, WIN BIG
London’s ‘Cinderella’ locations offer greatest opportunity for buyers and investors in Asia
A Jetgala Digital Exclusive, Images courtesy of Barratt London
Posted on 22 June 2022.
The latest research from Barratt London and Rightmove reveals a wide range of underappreciated hotspots that offer great potential for first-time buyers and residential investors alike.
These so-called ‘Cinderella’ areas, with planned transformations coming up, are mostly within active regeneration areas that haven’t yet seen huge gains compared to their gentrified neighbours where prices have already reached their peak.
Predicted to be the real winners of 2022 and beyond, these areas include Hayes, Hendon, East Ham, Catford, Tooting, Hounslow and Acton, which offer both lower initial purchase price and the likelihood of substantial capital gains.
“London suburbs are flourishing, with people willing to move further away from the city centre in search of more space and improved quality of life,” says Stuart Leslie, International Sales and Marketing Director at Barratt London. “With regeneration happening in areas such as Acton, Wembley, Harrow, Mill Hill and East Ham, we expect prices to rise in the outer zones over the next decade.
“Positive forecasts from many estate agents would suggest buyers will continue to see positive capital gains in the long term. While the wider UK market has seen massive house price inflation of well over 10 per cent in the last year, the capital saw the lowest regional price growth over the past 12 months, leaving a huge opportunity for buyers in Asia to take early advantage of expected house price growth.”
JLL similarly predicts that in 2022 the Greater London area will see growth outweigh that of the rest of the UK – 6 per cent as opposed to 4.5 per cent – and that this trend will continue for the next four years, leading to an anticipated increase in London house prices of 25.8 per cent compared with 21.7 per cent elsewhere in the country.
James Puddle, Founder and CEO of One Global Group, one of Barratt London’s selling agents, says: “London has lagged behind in the property boom of 2021, as buyers and renters looked out of the capital and city centres. However, we have already seen the trend reversing and more people coming back to the capital. We expect London to be one of the top performers in 2022.”
House prices in the UK capital also offer a great opportunity for Asian investors where cooling measures have made some local property investments more difficult. Puddle continues: “Governments in Southeast Asia have moved to cool their property markets with increases in additional stamp duties for second and subsequent home purchases. For example, Singapore buyers are able to purchase a London property with less cash outlay than just the stamp duty they would have to pay on a second or third property on an average condo in Singapore.”
“Buying in London doesn’t need to break the bank, there are a number of locations primed for growth. With the delivery of key infrastructure in the coming years – such as Crossrail – many areas are becoming more accessible and desirable to live,” adds Puddle.
Leslie notes: “Now is the time to purchase before we see significant price climbs that match up to those that we saw in more rural areas of the UK over the summer.”
He continues: “In the early stages of the pandemic, the city exodus tested London’s economic resilience. But the desire for fashionable urban living is certainly nowhere near abating, and crucially, presents fantastic opportunities for savvy buyers.”
The average home in East Ham is over 49 per cent cheaper than the overall London average at just £408,451 (compared to £675,263), according to Rightmove. It is one of the most affordable locations in Newham yet sitting in the top four boroughs for the highest volume of new build homes currently underway.
Leslie commented: “Starting prices are currently below the London average and very affordable, with local investment driven by one of the biggest regeneration masterplans in London. Buyers are clocking on to this hotspot; now is the time to buy here to see the most capital gains. The vibrant community of East Ham has lots of personality too – it’s a Zone 3 location that is going up in value fast.”
East Ham has experienced positive yearly house price growth of 2 per cent compared to its overplayed neighbours like Hackney, who actually saw a reduction in values by -3 per cent.
New Market Place, by Barratt London, is located in the centre of East Ham and will consist of 277 studios, one-, two- and three-bedroom apartments plus new shops, cafés and restaurants across a 1.9-acre site. Prices start from £320,000.
One of the most affordable places in this leafy North London borough is Harrow itself, where prices are rising yearly but only modestly at 3% compared to its more expensive neighbours like Stanmore (9 per cent) and Finchley (4 per cent), as gentrification still beds in. Early bird buyers have the best opportunity to buy affordably here and feel the benefit of capital growth as thousands of new homes, gyms, cafés, restaurants & a supermarket are all being delivered in this £1.75 billion regeneration hotspot.
Situated in Zone 5, but with Zone 2 travel times, Harrow is already an amazing place to live, with lots of green space and 98% of its schools judged as either Good or Outstanding by Ofsted. At the heart of the regeneration area is Barratt London’s Eastman Village scheme, on the site of the former Kodak factory. It will provide 2,000 new homes, plus restaurants, cafés, shops, and offices set around a landscaped park creating a new leisure, business, and residential destination. Homes start from £296,000 for a one-bedroom SMRT apartment.
Tooting, in Wandsworth, has shown increases of just 2 per cent over the past five years despite being on Lonely Planet’s list of the world’s 10 Coolest Neighbourhoods. But its Cinderella days may soon be over. Tooting is also nearby to desirable neighbourhoods Earlsfield and Wandsworth; according to Rightmove, the average price for an apartment in Tooting stood at £480,271 compared to £548,911 in Wandsworth and £517,020 in Earlsfield in 2022, making the desirable southwest London lifestyle a more attainable goal.
Leslie says: “Tooting is getting 32 acres of new public parkland – the first of its kind since the 2012 London Olympics. The desirability of southwest London has been incredible to watch over the past decade, and Tooting is becoming one of London’s most exciting and vibrant neighbourhoods with markets, independent shops, restaurants and bars popping up all the time. New developments here are still in their infancy, making way for a wave of new residents and amenities for the growing local communities. It’s definitely one to watch over the next couple of years.”
Springfield Place, Barratt London’s development in Tooting Bec on the site of the former Springfield University Hospital, will include 839 homes, complete with an on-site café, retail space, public square, the provision of land for a new primary school, affordable housing and 32 acres of public parkland. Prices start from £455,000.