London’s twelve hot areas for 2012

For shrewd investors we reveal London's top property hotspots for 2012.
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Borough Market, London
© Alamy
A “food hub” emerging around Borough Market is coaxing City buyers south of the river
London is bursting with regeneration schemes and transport improvements that are creating new property-buying opportunities — and not just for the city’s wealthy elite. Resourceful buyers on modest budgets can be winners, too.

Despite economic uncertainty people are getting on with life, planning their property moves for this year and beyond, aiming to put down roots in a good neighbourhood that will prove to be a solid investment.

Buying decisions are influenced by London being a collection of micro markets where local factors, such as well-regarded schools or prized architecture, can heavily influence prices.

There are also emerging districts, benefiting from regeneration or an influx of creatives, where arguably prices have not reached their full potential. Other places are under a veil, poised to be uncovered, and could be future hotspots.

Estate agency Knight Frank predicts that the biggest price rises during the next five years will be in a dozen improving areas lying just outside the gold-plated territory of “prime central London”.

THE FLIRTY DOZEN Current value 2016 forecast Price rise
1 Vauxhall/Nine Elms £750 a sq ft £1,800 a sq ft 140 per cent
2 City of London and its eastern fringe £800-£1,000 a sq ft £1,750-£2,000 a sq ft 118 per cent
3 Hammersmith £700 a sq ft £1,250 a sq ft 78 per cent
4 Marylebone/Fitzrovia £1,500 a sq ft £2,500 a sq ft 66 per cent
5 Earl’s Court £1,250 a sq ft £2,000 a sq ft 60 per cent
6 White City/Westfield £900 a sq ft £1,400 a sq ft 55 per cent
7 Farringdon £850 a sq ft £1,300 a sq ft 52 per cent
8 Paddington/Bayswater £1,650 a sq ft £2,500 a sq ft 51 per cent
9 Holborn/Midtown £1,500 a sq ft £2,250 a sq ft 50 per cent
10 Victoria £1,350 a sq ft £2,000 a sq ft 48 per cent
11 South Bank/Blackfriars £1,250 a sq ft £1,800 a sq ft 44 per cent
12 King’s Cross £650-£1,000 a sq ft £900-£1,400 a sq ft 38 per cent

Cardinal Place shopping centre in Victoria
© Alex Lentati
The new Cardinal Place shopping centre is helping turn Victoria into a key undervalued hotspot
In these locations, new-build values are forecast to jump between 38 and 140 per cent. Why? Because key infrastructure projects, such as the east-west Crossrail link, combined with accelerating gentrification and a property shortage, are fuelling demand. A lifestyle preference to live within walking distance or a short bike ride of the main key centres is another reason.

In London, urban renewal is a constant and even in posh postcodes there are sometimes pockets of opportunity. Pimlico and Westminster in the sought-after SW1 postcode, stand out as comparatively good value. Find: property in Pimlico | homes in Westminster

Developers are pushing up values in line with the area’s rising status, demanding up to £1,500 a sq ft for top new apartments. But the going rate remains about £1,000-1,200 a sq ft, which is cheaper than many central-London buyers expect.

Coming soon is The Courthouse, a redevelopment of a former magistrates’ court in Horseferry Road that will create 144 apartments. Call Barratt on 020 8326 7100. Berkeley Homes also has two projects in the pipeline — Abell House in John Islip Street and Cleland House in Page Street.

Formerly uncool districts are swinging into fashion while others are being rediscovered. Sometimes you cannot define why an area is on the up, yet you can detect it, feel the vibe. It is not always because of carefully planned regeneration, rather a confluence of people and bargains that make a place special. It could be a demographic shift (say, bankers moving to Notting Hill), a new food and restaurant hub (Borough Market) or shrewd estate management (Howard de Walden in Marylebone).

Co-founder Rhonda Drakeford at design “concept” store Darkroom, in Lamb’s Conduit Street in Bloomsbury
© Rebecca Reid
Co-founder Rhonda Drakeford at design “concept” store Darkroom, in Lamb’s Conduit Street in Bloomsbury. Fitzrovia is seeing a well-managed move upmarket by its estate landlord
In recent years, Shoreditch has become a furnace for stylish entrepreneurialism and is now a residential hotspot, too. Designers and artists settled there because of the relatively cheap commercial premises, sparking a street scene that others aspired to. House prices are continuing to rise on the back of this. Search for property in Shoreditch.

Tips for ‘gamblers’

People who gamble on new frontiers often get rewarded for their boldness — like those who moved to Canary Wharf and those who more recently spotted Dalston. The point about regeneration is that it often takes a long time — five years at least, possibly 10 or even 20, for the full impact to be felt.

So you have to be patient to get the full benefits. And weigh up whether the wait is worth it. Nine Elms in Battersea, billed as central London’s last large-scale regeneration area, falls into this category.

Another warning for buyers is that developers are prone to hype regeneration zones and set values higher than might be expected. By coming up with new design ideas and lifestyle extras, developers can lift the image of an area beyond its traditional appeal and command steep prices based on the promise of better things to come.

Affordability is relative. Though value for money is every homebuyer’s goal, first-time buyers will have a different set of priorities to, say, a couple trading up or parents with toddlers. Estate agents report that in this new cost- conscious era, family buyers are ruthlessly examining the fundamental merits of an area — schools, shops, transport, open spaces, neighbourhood amenities — and are no longer buying merely to be near friends or because it is a place they aspire to live in.

Nine Elms, London
A transformed Nine Elms will have a “glass cube” new US embassy at its heart. The first new riverside homes will be launched in the spring
Buyers determined to get ahead in the property game tend to do a lot of research — they keep a close eye on specific streets and buildings, speak to estate agents, shopkeepers and local businesses, monitor corporate relocations and even attend council planning meetings to see what is in the development pipeline. Hotspot predictions from industry “experts” are worth considering, too, but avoid agents merely promoting their own patch.

Top of the tree

Knight Frank’s cherry-picked 12 central London locations are where it believes the “underlying market is undergoing improvements and there is real potential for price growth over the next five years”. Top of the tree is Vauxhall/Nine Elms, a 450-acre regeneration zone where two new Northern line stations are to be built. Riverlight, the first apartment scheme out of the blocks, launches in spring. Contact St James on 01372 364500. Search for property in Vauxhall.

Some of the Knight Frank forecasts appear bullish but the analysis is food for thought and a decent starting point for bargain hunters. The pounds-per-square foot valuation method used highlights the price gap between areas and is illuminating in itself.

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