New homes in London's Zone 2 fringe areas
* Riverside districts on the south bank of the Thames, such as Nine Elms and Vauxhall, are set to jump in price during the next five years
* More people are moving south of the Thames as buyers are realising they can get property twice as big for half the price.
Zone 2, ringing central London’s most expensive neighbourhoods, is the area of choice this autumn for smart home buyers searching for space and good value.
Developers are stepping up to build more homes in Zone 2 areas — finding that they can build bigger and sell to a market likely to thrive in the next five years. Leading estate agents also predict these so-called “non-prime” areas will see the biggest price gains.
“Even some wealthy buyers cannot afford to live in the best central locations,” says Andrew Palmer of property consultant DTZ. “This has triggered a hunt for cheaper addresses that are still close in.”
Holborn and Aldgate are changing fast as they return to residential, and have still to reach their full potential for prime inner London. Buyers are also looking with fresh eyes at Bloomsbury and Barnsbury, and family-friendly neighbourhoods such as Primrose Hill, Wandsworth and Fulham, where smart riverside developments are under way.
Increased stamp duty thresholds are having an impact, too. Buyers want to avoid the higher rate payable on homes priced above £1 million (five per cent) and £2 million (seven per cent). Often this boils down to buying a home with a value of no more than £1,000 a square foot, a price point that has spread to reach Hammersmith in the west, Lambeth to the south, Swiss Cottage in the north and Shoreditch in east London.
“Second-tier areas often have a greater variety of property and a more village-like feel, which makes them a prime opportunity even if they are not ‘prime’ areas,” says Nicholas Finn, director of Garrington Property Finders.
Good-quality homes in fringe areas
The property experts are beginning to think that the top-tier areas, such as Knightsbridge and Mayfair, have peaked in value and that a “catching-up” process is kicking in as developers deliver better homes in fringe areas.
This is borne out by the latest Land Registry data showing some Zone 2 boroughs registered double-digit price rises over the last year, ahead of Kensington and Chelsea.
Moving to the other side of the river
Cross-river moves, once uncommon, are another market trend, according to Winkworth, which has 60 branches across London. The main flows are from north and west London to south London, where family houses are significantly cheaper and new London Overground stations are helping to revitalise areas such as Brockley, Dulwich and Crystal Palace.
Buyers are realising they can get a property twice as big for half the price and still get to work quickly. One hot address is Telegraph Hill, SE14, where large Victorian houses priced up to £1.3 million are attracting City people, doctors and lawyers from other parts of London. The commute to London Bridge is six minutes. Houses with the same floorspace in, say, Pimlico would cost £3.5 million-plus.
Research by property data company Lonres shows square-foot values in south London average £650. This compares with £956 in north London and £1,075 in west London. New developments are of varying quality and scale, and many are under construction, meaning buyers have to beware and do their homework.
For family buyers, the good news is that planners are keen to encourage more and better new-build houses. Five years ago, 95 per cent of all new homes in the capital were apartments whereas by 2015 about 30 per cent of new homes will be houses.
“Well-designed townhouses do not have to cost a fortune and boost areas by attracting families, who demand better schools, libraries, parks and neighbourhood shops,” according to Sean Ellis, managing director of St James, soon to launch 13 four-bedroom houses at Hurlingham Gate, Fulham. Coming later are 68 apartments. Call 020 8246 4199.
The inner-London boroughs with the most new homes
In the spotlight are Islington, Southwark, Lambeth, Wandsworth, Hammersmith, Fulham, Camden and Hackney. Up to 60 per cent of the 278,000 new homes planned for London during the next decade will be built in inner-London boroughs.
New riverside homes by the Thames
Riverside districts on the south bank of the Thames are set to jump in price during the next five years, says Knight Frank. “Nine Elms to Vauxhall will change out of all recognition, while the extension of Tate Modern, due for completion next year, will see Bankside values rising even higher.”
South Bank Tower is a refurbishment of an office skyscraper in Stamford Street bringing 173 private homes. Prices from £625,000. Call 020 7409 8756. Directly opposite on the north side of the river is Holborn, which takes in the former newspaper district around Fleet Street and the historic Inns of Court, and borders Georgian Bloomsbury.
Global law firms have moved in recently, sparking demand for local main homes, and crash pads for high-earning career professionals. There are niche developments of boutique flats, in keeping with the area’s individuality, but bigger projects are under way.
A slab of nondescript office blocks by Temple station has been bulldozed to make way for a courtyard complex of 206 apartments. To register, call Berkeley Homes on 020 7118 9190.
St Dunstan’s Court, an outdated office building on Fetter Lane, is being redeveloped by Taylor Wimpey into 76 apartments. Prices from £790,000. Call 020 3675 0673.
Fulham is described as “affordably prime” by Jo Eccles of Sourcing Property. Family houses sell for approximately £1.5 million to £3 million, the same as a prestige apartment in one of Chelsea’s best roads. Waterfront regeneration is bringing cafés, bars, boutiques and galleries to former industrial zones. Fulham Riverside, between leafy, polo-playing Hurlingham Park and sought-after Peterborough Estate, replaces a supermarket depot.
The 8.25-acre development will have 463 homes either side of a central piazza and boulevard leading to the river. Prices from £525,000. Call Barratt on 0844 8114334.
Developer London Square is aiming to capture SW3 emigrés at Farm Lane townhouses. The two-acre site, once a base for horses and Hackney carriages, is set to become a traffic-free retreat with 40 homes. Residents will have use of an underground private garage with direct access to the house. Construction is under way. Call 01895 627 300.