London house prices raced ahead of the rest of the UK in 2013. Between September 2012 and September 2013, prices in the capital rose on average by 9.3 per cent, according to the Land Registry – more than double the average price rise of 4.3 per cent across the southeast of England.
In many pockets of the city, prices rose much more than that. The City of London saw growth of 49.3 per cent, according to the Land Registry, and agents in newly popular locations such as Brixton say prices soared by 35 per cent in the past year.
So the question is: where next? First-time buyers, home movers and buy-to-let investors are all on the lookout for good investments and, according to research by the estate agency Savills, it is the “mid-tier” boroughs that are likely to see the most growth over the next five years.
“Prices in areas such as Kensington and Chelsea, Westminster and Islington have grown a phenomenal amount in the past five years, and we are now at the stage in the housing cycle when other boroughs are catching up,” says Lucian Cook, director of UK residential research for Savills. “Places like Ealing, Tower Hamlets, Lewisham and Barnet have good housing stock and could well see the most growth over the next five years.”
Here is a glimpse of the housing markets in some of London’s up-and-coming boroughs.
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Barnet, north London
Many local agents say that Barnet, on the fringes of Hertfordshire, has the best of both town and country: close to rolling fields, but with excellent transport links to central London as well, writes Nathan Brooker. It is certainly a borough of contrasts, with the pokey flats of North Finchley on the one hand and the gated mansions of Hadley Wood on the other. Property prices in Barnet actually fell by 4 per cent in the year up to June 2013, according to the Land Registry, but this is probably down to the wide range of stock and buyers.
Prices for the modern Hadley Wood mansions, to the northeast, have risen annually by 5 per cent for years, agents say. Meanwhile, three- to four-bedroom 1930s and Edwardian homes in West Finchley and Finchley Central are available from £450,000 and are proving popular with families priced out of neighbouring Haringey.
£1.5m buy: A four-bedroom Edwardian house in Finchley with a 3,218 sq ft of living space, a large garden and a private roof terrace. On sale via Kinleigh Folkard & Hayward.
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Ealing, west London
Long associated with the comedy films of Ealing Studios starring Alec Guinness, today Ealing is more commonly thought of as typical inner suburbia, attracting middle-class families looking for Chiswick and Hammersmith without the price tag. Detached houses are available here from £850,000. The most popular properties are on the streets near Pitshanger Lane, a hub of independent retailers including a bakery, bookshops and several bistros.
Jason Scott, sales manager at Kinleigh Folkard & Hayward’s new branch in Ealing, recently sold a five-bedroom Victorian house there for £900,000. “Up the road in Chiswick that would be £1.3m or so. I’ve worked in west London for 15 years and can’t believe what good value Ealing is.”
There is also an investment angle to the Ealing story. Development across the borough, particularly in Acton, has been on the up in recent years due to the imminent arrival of Crossrail, the west-to-east London railway due to open in 2018. Berkeley Homes has recently launched the latest phase of its huge Napier development near Acton Main Line station, at which Crossrail will stop. Three-bedroom houses here cost from £950,000.
£1.5m buy: A five-bedroom semi-detached home with a contemporary interior near Ealing Common. On sale via Kinleigh Folkard & Hayward.
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Tower Hamlets, east London
The warehouses of Wapping might not exactly look like a bargain. After all, £600,000 for a one-bed apartment still seems rather pricey, even in the capital. But compare this stretch of embankment on the north side of the river with its counterpart on the south, and suddenly the picture changes. “Properties in Wapping are still about £750 per sq ft, compared with about £1,200 per sq ft across the water in Shad Thames,” says James Hyman, head of residential for London estate agency Cluttons. “It is a bit hidden away, but actually it’s just a 30-minute walk to Bank station. And it’s on the East London Line now.”
Wapping is full of trendy warehouses, as well as new-build flats, wine bars and restaurants. But Tower Hamlets is a mixed bag, associated with ethnic tension and gritty streets as well as sought-after property. “On the upside, other parts of the borough are cheap, which means it attracts young professionals who rent and who then look close by when they need to buy,” says Hyman. Investors may want to consider the St George’s development at the former News International site, or the 11-acre mixed-use development on the Isle of Dogs, which will eventually have 850 residential units.
£1m buy: A two-bedroom apartment in a warehouse conversion in Wapping. On sale via Cluttons.
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Lewisham, south London
Lewisham is the natural heir to Hackney. Both boroughs were once home to tatty, forgotten housing stock, reputations for crime and substandard transport systems. But prices in Hackney have soared in the past five years, jumping 12 per cent in the past year alone, according to the Land Registry, as artists, trendy twenty-somethings and families looking for something a bit livelier than humdrum suburbia have flocked here.
Lewisham, now benefiting from the East London Line, which passes through Shoreditch in Hackney down to Forest Hill and Sydenham, is drawing those same punters farther south, where three- and four-bedroom homes are just about still available for under £500,000, although prices are rising rapidly. “The media and arts crowd are often the pioneers of gentrification,” says Lucian Cook of Savills. “Hackney is a very complete borough in that it has great period properties, beautiful parks and great shops and restaurants. Lewisham is similar in that it has great housing stock and has the parks and shops of Dulwich nearby. Now that it has the transport links too, it has taken over from Peckham as the new on-trend place to buy south of the river.”
£1m buy: A five-bedroom semi-detached Victorian house near Blackheath Park. On sale via Kinleigh Folkard & Hayward.
Seeking price growth? Check the Tube map
In a city as sprawling as London, it makes sense to look for public transport improvements when seeking out house price growth, writes Kate Allen.
Overhauls in public transport can transform local housing markets. A good example in recent years has been the creation of London’s Overground network, which has boosted prices in a series of previously little-known neighbourhoods.
There is likely to be some price growth in areas that are shortly set to join the network. In 2015 two West Anglia mainline services will be handed over to Transport for London, which will add them to its network – meaning that they will appear on the Tube map.
Tottenham could see prices rise as a result as more people realise that it is a less than 15-minute journey into Liverpool Street station.
But the project that will have the biggest effect on local house prices in coming years is Crossrail, a major new rail line running east-west across the capital, which will open in 2018. Two locations stand out, at either side of the city.
The first is Abbey Wood in southeast London. This will be one of Crossrail’s eastern termini. At the moment sleepy and suburban, the area is set to be transformed once it is directly connected to Canary Wharf, the West End and Heathrow. There are plenty of good family-sized period terraces and semis with gardens – plus lovely local parks and woods.
The second area that Crossrail will affect is Acton in west London. Generally regarded as Ealing’s scruffy cousin, this area will also see rising prices. It is already on the Central Line but when Crossrail opens it too will be connected directly to much more of the city.
Just up the road, Old Oak Common will become a major regeneration site in the coming years, with homes, shops and a new football stadium for Queens Park Rangers. The area is on the route for the government’s controversial High Speed 2 rail link, which, if approved, would connect it directly to Euston station.
Another transport improvement to watch is the north-south line Thameslink, which is being upgraded: capacity on the line will increase substantially, a boon for commuters. One area that is well placed to benefit is Hendon in north London. Currently on the Northern line, Hendon will soon have Thameslink trains every two-three minutes direct to Farringdon.
Kate Allen is the FT’s property correspondent
Smart buys in London
Where: In Ealing, west London, 10 miles from Heathrow and nine miles from central London. The property is half a mile from
Ealing Broadway Tube station, where trains to the City take 30 minutes.
What: A seven-bedroom, three-bathroom, detached red-brick house with two reception rooms, dining room, fitted kitchen and basement. The property also benefits from a large garden, tennis court, garage and secure forecourt parking.
Who: Rolfe East, rolfe-east.com, tel: +44 20 8567 2242
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Where: Overlooking Hadley Green in Barnet, north London, 24 miles from Heathrow, 12 miles from central London and half a mile from High Barnet Tube station, where trains take 35 minutes to the West End and 45 minutes to the City.
What: A seven-bedroom, Grade II-listed, Georgian property, with a large reception hall, drawing room, dining room and conservatory on the ground floor. The property also has a garage, off-road parking and almost an acre of mature gardens.
Who: Savills, savills.com, tel: +44 20 8447 4400
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Where: In Lewisham, southeast London, 24 miles from Heathrow, seven miles from central London and a few minutes’ walk from Lewisham DLR station, where trains to Canary Wharf take 20 minutes.
What: A five-bedroom, detached house with more than 4,000 sq ft of interior living space, including a study, day room and conservatory. The property also has a separate garden studio, converted into a home cinema.
Who: Winkworth, winkworth.co.uk, tel: +44 20 8852 0999
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Where: A short walk from Acton Town Tube station, nine miles from Heathrow and eight miles from central London. Trains take 22 minutes to the West End and 37 minutes to the City.
What: A six-bedroom Victorian house built in 1867 and in need of some modernisation. The property is arranged over four floors and benefits from high ceilings and many original features.
Who: Foxtons Chiswick, foxtons.co.uk, tel: +44 20 8996 6000
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Where: In Tower Hamlets, east London, half a mile from Canary Wharf, five miles from central London and 22 miles from Heathrow.
What: A two-bedroom duplex apartment on the 21st and 22nd floors of the No. 1 West India Quay building, with floor-to-ceiling windows. Amenities include 24-hour concierge and an allocated car parking space.
Who: Savills Canary Wharf, savills.com, tel: +44 20 7531 2500