Northern Rock’s decision this week to bolster new mortgage lending by £14 billion over the next two years will give some encouragement to wavering homebuyers preparing for their Easter break with a house search.
The move by the state-owned lender could be the starting gun for buyers and those with a healthy deposit available, who are going to take advantage of low mortgage rates and hunt for homes ahead of the pack while there is a big choice of bargain-priced new and second-hand property available.
Discerning buyers know that London has its own micro-climate — that prices have fallen faster, some by up to 30 per cent, the bottom of the market is near and foreign buyers are piling in. But where should they be looking?
Wise househunters will focus on areas poised to perform well over the medium- to long-term. Prices may take some years to recover fully, so think carefully about the outlook for a particular location: its regeneration potential, infrastructure and transport available and planned, accessibility and amenities.
While some major regeneration projects have been put on the back burner because of the credit crunch, others, such as redevelopment of railway land at King’s Cross, are going ahead.
Transport upgrades, such as the East London line extension, are under way, too, giving a boost to overlooked or neglected neighbourhoods. Last month, the opening of a new Docklands Light Railway station at Royal Arsenal, Woolwich, went largely unnoticed despite the new rail link connecting this up-and-coming area to the City and Canary Wharf for the first time.
A smart strategy in the current market is to concentrate on well-placed areas ringing central London’s super-prime locations. In these areas, average values now range between about £500 and £800 a square foot, in most cases back to the level of five years ago.
This inner ring includes fashionable places such as Maida Vale, Bloomsbury, Covent Garden, Islington, Clerkenwell, Shad Thames, Bankside, Battersea and Pimlico.
Where to look
The area from Bayswater to Fitzrovia is also fertile territory. This patch lies just north of high-priced Mayfair and Knightsbridge and south of the improving Paddington and King’s Cross regeneration zones.
Bayswater in particular is full of period architecture ripe for individual refurbishments, and there are several new-build schemes — niche and bigger projects — where developers have reduced prices on designer flats (see below).
In Ecclestone Street, the less posh end of Belgravia, Cluttons is selling an unmodernised four-bedroom flat for £975,000, equivalent to £500 a square foot.
So, right across these central areas buyers are able to cherry-pick good-value new-build bargains and resales. Forensic buying skills are required to secure the best deals.
The Lancasters is Bayswater’s most glamorous new development for many decades: 77 grand apartments, some with 4.8 metre high ceilings, behind a retained, listed Victorian façade overlooking Hyde Park.
The building sits back from busy Bayswater Road and has its own front garden extending the entire width of the terrace. This will be a gated landscaped driveway and arrival point for residents. Below ground will be two levels of underground parking and a luxury spa.
The developer is Northacre, whose other developments includes The Bromptons in Fulham Road and The Phillimores in Holland Park. Homes at The Lancasters will be released nearer completion in 2010. Call 020 7349 8000.
Estate agents say there is remarkable disparity in values between neighbourhoods bordering Hyde Park, and that Bayswater is the most “undervalued”. Whereas Knightsbridge commands £3,000 a square foot, most homes in Bayswater sell for less than £1,000, though Northacre expects to achieve more than this at The Lancasters because of the build quality and extras such as gated security and around-the-clock concierge services.
Bayswater stretches from Marble Arch (by the Blairs’ home in Connaught Square) to Westbourne Grove. The area was laid out in the mid 1800s when grand squares and cream stuccoed terraces started to fill the acres between Paddington station and Hyde Park. In the early 20th century its character started to change. The influx of railway travellers triggered conversion of houses into bedsits and B&Bs.
Bayswater is still awash with shabby tourist hotels but in recent years gentrification has spread, especially towards the border with Notting Hill.
In Fitzrovia, Fitzrovia Apartments is a redevelopment of a former orthopaedic hospital in Bolsover Street, W1 — 70 flats, including four penthouses with large roof terraces. Prices range from £650,000 to £4.25 million. Call Hamptons International on 020 7758 8479.
A rare Georgian town house in Percy Street, Fitzrovia, is on the market for £3.05 million through EA Shaw (020 7240 2255). The 4,952sq ft property has five bedrooms, a library, wine cellar and courtyard garden.
Covent Garden prices have dropped by about 25 per cent, which has reignited buyer interest, according to Lisa Hollands of EA Shaw. “We are madly busy and some flats are even going to best bids,” she says.
Approximately £350,000 is the entry price for a one-bedroom flat in Theatreland, close to all the action. A bijou 310sq ft flat in charming Floral Street is on the market for £415,000. Call 020 7240 2255.
Buying into a niche development that in normal times would carry a price premium is another way of getting added value. Londonewcastle’s speciality is designer apartments in trendy rather than established parts of town such as Camden and Angel. The target audience is discerning second- and third-time buyers who work in the creative sector.
The company’s Islington developments include the Wenlock Building (canalside apartments), The Wallpaper Factory (loft-style flats) and Arundel Square (homes in a new garden square). Prices start at £320,000 to £1.5 million. Call Savills on 020 7472 5024 or Chesterton on 020 7288 0330.
Regeneration of Bankside and Southwark’s historic waterfront has been one of the development highlights of recent years. Tate Modern, the Millennium Bridge, Oxo Tower, Globe Theatre, Borough Market, City Hall and the gleaming new office estate alongside it, all have helped shift London’s centre of gravity.
Indeed, the South Bank has become London’s first contemporary urban quarter, tipped to bounce back quickly and outperform over the medium term. Under way on Holland Street, right next to Tate Modern, is a scheme of 370 apartments in five towers designed by Richard Rogers, due for completion in 2011. Call Native Land on 020 7349 7228.
* Get to know the patch thoroughly.
* Quiz agents and developers.
* View as many properties as possible so you can better judge specifications and compare prices.
* Consider any lease or planning restrictions.
* Narrow down your choices.
* Be businesslike when negotiating the price.