With 65,000 affordable new homes planned to be built in London per year, it would appear that the capital is offering new opportunities when it comes to house buying.
London Mayor Sadiq Khan’s draft London Plan means that the London property map will be greatly altered. With high prices in parts of central and inner London, young buyers have had to look at other areas if they want to invest in property.
With a range of regeneration projects and transportation upgrades, parts of London that would not normally be top of a property shopping list are being revitalised, creating brand new hotspots and opportunities that are hard to ignore. The Mayor’s London Plan has set out targets for each borough in the city as well as identifying ‘Opportunity Areas’ in which large amounts of investment are being channelled.
These ‘Opportunity Areas’ are priority zones where development and regeneration are to be accelerated. It not only outlines a plan for a city, it is a map of areas that property investors should look to as early as possible if they want to reap the benefits further down the line.
There are as many as 30 areas designated for this attention, and the process has already begun in Stratford and Nine Elms. It now seems that Charlton Riverside, Colindale, Cricklewood, Harrow, Kensal Canalside, Catford, New Cross, Ilford, Southall, Park Royal, Woolwich, Thamesmead and Abbey Wood are next in line for a period of regeneration.
Until now, developers have tended to focus their attentions on the areas surrounding Travel Zones 1 and 2. However, there is now a shift towards areas from Zones 3 to 6 where homes can be built at a comparatively more affordable price for buyers. Currently, prices range from £250,000 to £800,000 with great variations only a few tube stops apart.
The focus on these areas is thanks to the development of Crossrail, which will make some of these districts more accessible.
The real hotspots
One of the hottest areas to consider in London at the moment is Tottenham, thanks to a £1 billion regeneration scheme. With a planned 10,000 new homes and 5,000 new jobs over the next seven years, a £400m redevelopment of Tottenham Hotspur’s stadium and the potential to become a key interchange station on the proposed Crossrail 2 route, it is an area that cannot be ignored.
At Forest Gate, you can buy a property for an average price of £442,000 and get a rental yield of 4.1%. The Elizabeth Line is due to begin running later this year, putting the area less than 20 minutes from important areas such as Bond Street and Canary Wharf. This typically undervalued area has a healthy rental potential at the moment, with plenty of scope for increases in the near future.
The departure of the BBC from White City has left it ripe for transformation. Billions of pounds are being spent to reinvent the area with the inclusion of 950 homes, as well as offices, restaurants, bars a hotel and private members’ club. A new campus for Imperial College is the final piece in the puzzle to explain why people are already flocking here.
Regeneration is also sweeping across Wembley, with more expected in areas such as Whitechapel and Tooting Broadway. Lewisham is becoming popular as buyers are able to skip studio flats in favour of two and three-bedroom properties, but prices here may change if the proposed expansion of the Bakerloo Line takes place in 2023. Whilst Wood Green remains untouched for the moment, the approval of Crossrail 2 will change all that.
Buying a property in London has never been easy, but moving away from the typically popular areas to these up and coming hotspots could prove to be a profitable investment.
Mark Burns is the managing director of property investment firm, Hopwood House.