From Sands End to Old Oak Common: five property investment areas to watch

Invest now as ugly duckling areas are transformed by regeneration and watch the value of your home soar.

A regeneration zone can spark a house price explosion in the streets within and around it. Sands End, once the grimy industrial heart of Fulham in south-west London, illustrates the wisdom of moving into an area just as the diggers arrive and cranes start to appear on its skyline.

Over the past decade, this once- forgotten backwater on the wrong end of King’s Road has seen prices rise by 161 per cent — largely thanks to the stretch of new developments running southwards from Chelsea Harbour, which have heightened interest in the area and brought new facilities, including a train station.

According to exclusive research by property data provider LonRes, homes in the hinterland of what is officially known as the South Fulham Riverside Regeneration Area now sell at an average price of £1,004 a square foot.

New homes beside the Thames at developments such as Chelsea Creek and Fulham Reach sell for an average £1,372 per square foot, up 89 per cent since 2005.

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Royal connections: Harry and Wills like The Sands End gastropub

While prices in Sands End are now high enough to deter many London buyers, the Cinderella-like story of how it has been transformed from a neglected area into a fully fledged luxury home hotspot is a lesson to anyone hoping to invest in property: buy close to regeneration, bide your time and values will almost certainly outperform the London average.

Marcus Dixon, head of research and data analysis at LonRes, believes there are two key reasons why homes around the South Fulham Riverside Regeneration Area have done so well. The first is that, historically, the area had been blighted by proximity to an ugly industrial swathe of warehousing, meaning prices were kept down. But once regeneration was announced canny buyers started to move in, hoping for capital growth.

The opening of Imperial Wharf railway station — in Zone 2 — in 2009 cemented the area’s popularity, as has the opening of new businesses, such as The Sands End, once a back-street boozer but now a smart gastropub. It is co-owned by former royal equerry Mark Dyer, and Princes William and Harry are among its clientele.

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Imperial Wharf: river views and a new railway station

Anyone hoping to buy into this neighbourhood today will need a significant budget. Jamie Lester, managing director of Haus Properties and a former Sands End resident, says that buying one of the area’s three-bedroom Victorian cottages would cost about £1.1 million to £1.2 million, while two-bedroom flats are priced from about £700,000 to £900,000.

How prices have risen

         
An average flat in...  2005 2010 2015 5-year change  10-year change 

Postcodes surrounding South Fulham Riverside    

£339,698  £509,456 £886,036 74% 161%

Hammersmith & Fulham (the borough)     

£269,728 £380,315 £609,271 60% 126%

Greater London     

£247,746 £339,461 £471,608 39% 90%

Source: LonRes/Land Registry (surrounding postcodes include SW6 2, SW6 3)

Meanwhile, homes at Chelsea Creek, where development is ongoing until 2021, are 65 per cent sold. Currently available are one-bedroom flats, due to complete in 2017, for £849,950. For those with money to burn, a duplex penthouse with five bedrooms and five bathrooms is £16.95 million. It will be ready to move into next winter.

Despite its high prices, Lester believes there is still room for price growth in Sands End. “Compared to its neighbouring areas — like Chelsea, South Kensington and Earls Court — it is still good value,” he says.

A fanfare for Old Oak Common

If Sands End is now out of the question, another, more affordable regeneration area with huge scope for development is Old Oak Common.

Plans for 25,000 new homes and a railway hub the size of Waterloo could see the semi-derelict 383-acre site in north-west London turn into the capital’s biggest regeneration project since Stratford.

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Future hotspot: Old Oak Park

Mayor Boris Johnson believes Old Oak Common’s potential is “unprecedented” and that its benefits will spill out into surrounding areas,  including Park Royal, North Acton and Willesden Junction.

This is a project in its very early stages. Developer London and Regional Properties is consulting on plans for 9,000 new homes between Wormwood Scrubs and Willesden Junction, which it has named Old Oak Park. But for those willing to take a long-term approach, the streets of former railway workers’ cottages around Willesden Junction are starting to look like a very sensible buy.

“We are already starting to get that sort of interest, especially from investors and first-time buyers,” says Tony Bunce, branch partner of Daniels estate agents. “The average price of one of the workers’ cottages is about £500,000 — you would pay that for a two-bedroom flat in Kensal Rise.”

The compromise is that Willesden Junction is a far from glamorous location at the moment, although it is in Zone 2 and only a half-hour commute to the West End. Locally, Behesht, a Persian restaurant in Harrow Road, is recommended for its good food and frankly extraordinary décor.

However, for nightlife, shopping and café culture, residents will need to travel — although not that far. Queen’s Park is two Overground stops away, with Westfield at Shepherd’s Bush less than a 15-minute hop. “I think that in 10 years’ time, the area will be completely different,” says Bunce.

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