Value for money and London are generally two ideas that don't seem to go together nowadays, particularly when it comes to property. Real estate prices and rents in the city far outstrip everywhere else in the UK and while huge returns can be gained by investors, having the money to enter the market in the first place continues to be a big challenge.
This is particularly true in central prime areas, such as Westminster, Chelsea and Kensington. However, the landscape of the city is changing, creating opportunities in different boroughs for savvy investors.
"The neighbourhoods that were deserted in the post-war era are now being repopulated – by Londoners of all types," Savills explained in a supporting statement for their 'Shaping the future of London' report. "The prime area has grown but the extent of other residential neighbourhoods has grown too as gentrification, intensification, change of use and regeneration has meant that new neighbourhoods have been created."
As London spreads its wings, areas where value for money still exists are popping up on the radar of investors. However, buyers need to act fast to invest in an area before its popularity explodes.
Here are three London boroughs were its still possible to get more bang for your buck.
Hammersmith and Fulham
Yes, a property in Hammersmith and Fulham will set you back, but as the more affordable alternative of Kensington and Chelsea, its desirability will skyrocket over the coming years as A-grade real estate comes in short supply in the Royal Borough. It is expected that prices will rise by 23.7 per cent - un unsurprising fact given it is a known prime market.
Prime property is going from strength to strength in the capital at the moment, as international businessmen flock to the city. If you want to enter the luxury sector, Hammersmith and Fulham is certainly the place to do it.
There is also redevelopment in the area, which will open up new opportunities and make it much more attractive. Vast tracts of semi-derelict industrial land is expected to be transformed with up to 19,000 new homes. This is thanks to HS2, which will make Old Oak Common Britain’s best connected railway station.
Nicholas Botterill, Hammersmith & Fulham Council Leader, said: "HS2 will act as a catalyst to create much-needed new homes, jobs and opportunities in one of London's poorest areas. We have heard a lot about how HS2 will bridge the north-south divide and regenerate parts of northern England and the Midlands but it has also the potential to transform rundown inner London neighbourhoods right on our doorstep."
Hackney has been the site of much regeneration and development over recent years, but with projects still ongoing there are bargains to be had. Dalston is a particular hotspot and is one of the major up-and-coming business areas of London.
Currently populated by architects, photographers, music studios, fashion designers, web designers and publishers, businesses looking to avoid the high rents of central London will no doubt be heading to the area. The hotel market is also particularly vibrant here, thanks to its nightlife and leisure facilities.
More broadly, Hackney is becoming a buy-to-let hot spot. Edmund Cude letting specialists claim landlords are getting great returns on investment in the borough, with the average house price growing by around 7.4 per cent between 2011 and 2012.
Robert Nichols, managing director at Edmund Cude, said: "This ripple effect offers landlords an opportunity to take advantage of the most buoyant lettings market in the UK and to see their property appreciate in value at the same time. There can be no doubt that prime central London continues to drive growth across the capital, but Hackney, Lambeth and Waltham Forest are the jewels in London’s lettings crown offering landlords the best of both worlds."
Southwark is fast becoming one of the most sought after boroughs in London, so it's important to act fast to get the most value for money. However, its position among investors isn't for no reason. Some 40 per cent is currently under regeneration and developments are valued at around GBP 4 billion. In particular Elephant and Castle is proving to be attractive and over the next 15 years it is hoped that it will emerge as the capital's new exciting destination.
- Tuesday 16 July 2013