Calculate the price per square foot of homes in London's prime areas - and be surprised
The capital is buzzing with regeneration projects and major transport upgrades that can create property-buying opportunities for people prepared to grab a calculator and do their sums.
Even those with only modest budgets can profit if they begin their research by looking carefully at the price being asked for property based on pounds per square foot — then compare this with the properties in nearby streets.
This is a way of comparing values traditionally used by surveyors and land valuers but it can also be a powerful tool if you are aiming to benefit from regeneration schemes under way in the capital.
Would-be buyers in central London who use the “pounds per square foot” measure are often surprised to discover that, while one property can be priced at, say, £1,000 a square foot, homes just a few streets away are commanding £3,000. This tells them two things: firstly, they don’t have to travel out of central London to find good value and, secondly, if the cheaper property is in a regeneration zone it is likely to “level up” in value once improvements take place, to join its more expensive neighbours.
Micro manage your property search
In central London it is not just regeneration or better transport links that give an area a price lift. The city is a collection of micro markets where local dynamics influence property values.
The emergence of good schools, the creation of conservation areas, the opening of good shops, bars and restaurants can all lift prices in some streets above the area’s norm, creating a “value gap” between two central areas next door to each other.
Victoria and Westminster have many examples of these micro markets. While the SW1 postcode is much-sought after, Guy Meacock of property finding agency Prime Purchase says there are pockets in this area that stand out as good value.
There at 600 apartments in the pipeline in SW1, including a project by Land Securities, Kingsgate House on Victoria Street, and a new block at Victoria Circle overlooking Buckingham Palace (no prices yet).
Barratt is converting Horseferry Road magistrates’ court into The Courthouse, with 144 apartments (call 020 8326 7100), while Berkeley Homes has snapped up office blocks Abell House on John Islip Street and Cleland House on Page Street for residential development.
The West End and the City command high prices but the good value lies in the Holborn business and legal district set between the two, and also in nearby Lincoln’s Inn where there are five lateral apartments in a listed building for sale, and 14 apartments coming soon in an office block conversion at Red Lion Court, off Chancery Lane. Prices from £650,000. Gall Galliard on 020 7620 1500.
On average, and in general, central London properties cost about £1,500 a square foot, far less than the £4,000-plus commanded by so-called elite addresses in Belgravia and Knightsbridge. Around the edges of the congestion charge zone — in Camden and Clerkenwell, Pimlico and Primrose Hill, Wapping and Waterloo — values can be less than £1,000 a square foot.
Guy Meacock also tips Holland Park. “The area is confined to about 20 streets that tend to be wider and less densely developed than Notting Hill. Garden squares, such as Norland Square, once considered too far west, are attracting higher and higher prices but are still cheaper than Chelsea.”
Development is spreading from west-central London along Kensington High Street towards Hammersmith. The Parabola, a scheme of 62 apartments being built on the Commonwealth Institute site, is expected to raise the bar for the area. Another eagerly awaited scheme is 69 apartments at Campden Hill, on land next to Holland Park School. This is a joint venture between Grosvenor and Native Land. Call 020 7758 3650.
Estate agency Knight Frank predicts that the biggest price rises during the next five years will be in about a dozen or so improving areas (including Farringdon, Fitzrovia and King’s Cross) lying just outside the gold-plated territory of “prime central London”. 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 employment centres is another reason.
Let’s be ruthless
Though good-value is every home buyer’s goal, first-timers have a different set of priorities to, say, a couple trading up or parents with toddlers.
Estate agents report that more family buyers want to put down roots in London and are ruthlessly examining the fundamental merits of an area —schools, transport, open spaces, neighbourhood amenities — rather than proximity to friends or the area’s aspirational value.
“We’ve noticed a big shift from Shoreditch to the London Fields area in Hackney,” says Nick Karamanlis of estate agent Stirling Ackroyd.
“Houses are selling for £100,000 more than 18 months ago. Local schools have greatly improved. Last year 10 pupils at Mossbourne Academy, which specialises in music, were offered Oxbridge places.”