'Where is the market going this year?'
...our response… 'Depends on where you want to buy?'
Unlike other major international cities, areas in London sometimes just a street apart can show vastly different rates of growth.
Different areas, different reasons for growth
Prime central London property has seen a property price boom over the past decade. Prime central has become popular for several reasons including its great architecture. But not all areas 'primed' at the same time. Different areas became 'primed' at different times and for different reasons.
Just a decade ago, parts of prime central were just 'central'. For example, the Gloucester Road area of Kensington, now one of London’s most sought after locations was not long ago known for hostels and 'cheap hotels'.
Knowing where the growth patches are located in a particular area can make a significant difference when searching for a solid investment.
Improved transport links and good schools are strong indicators of an up and coming area, but other, sometimes less obvious reasons an area will see strong growth. For instance, the announcement of a new development like Chelsea Barracks is driving up prices in streets and buildings nearby which were previously disregarded by homebuyers and investors. The surrounding area hasn't changed and the Barracks development has barely started. But if you are investing five or ten years ahead, the investment prospects are good. Savvy buyers understand the 'ripple effect' the Barracks is having on surrounding streets. But getting in early and buying in the right street or building is critical.
Are there any areas left to 'prime'?
It's unlikely there will not be another Kensington or Mayfair but parts of London seeing above average growth, still exist.
Battersea and Nine Elms
Much has been said about Battersea and Nine Elms. Its core strength is its location. Its weakness being – there‘s no tube station. But, this is likely to change. Although south of the river, Nine Elms is London’s last centrally located piece undeveloped land.
Bordrering London’s finest prime central areas, Bayswater and Paddington will only go in one direction. The arrival of Crossrail is in 2018 will give the area a further uplift. Although the area is still a bit run down in parts this further adds to its appeal to early buyers.
Home to ‘Silicon Roundabout ‘and the highest concentration of architects in the world. Clerkenwell has a wide appeal and a lot of unique streets and new developments. Although the market does not have the appeal of Bayswater but rental market is still very strong and buying in the right street is essential.
Each of these areas have seen a boom of their own in the past two decades, but they are still, on average 40%-70% below their prime central neighbours. But with large regeneration projects and improved transport connections, these central areas are catching up with London's premier neighbourhoods.
For buyers, the main advantage being that some streets and areas in these new investment hotspots look superb value in comparison to their prime central neighbours.
There are more than a dozen areas being touted as London's investment hotspots, all with their own strengths and weaknesses. But some have been over-hyped by story hungry journalists and overenthusiastic estate agents. For this reason, we have analysed the seven top areas in our London Property Hotspots Report 2013, that can be downloaded from the bottom right hand corner of this page.