But is it worth your dosh?
With people queuing up in droves in below freezing temperatures this month to scoop up homes at the new Battersea Power Station development – one thing is crystal clear, big things are coming to Battersea.
This might have come as a surprise to some of us who are still stuck in a bygone era and thought of Battersea as a sleepy hamlet south of the river, but it’s been on the radar for buyers, investors and businesses, desperate to get in early in what looks set to become one of London’s newest property hot spots.
As the big guns have been swooping in, they have been irreversibly changing both Battersea and the neighbouring areas beyond it, where everything is being spruced up and gradually catapulted into the realm of Central London greatness.
If you were not one of those frozen souls haggling for a Battersea Power Station home, you can be forgiven for thinking that you have missed the Battersea investment boat, but far from it. While the newer developments may be pricing many of us out, they are also creating opportunities ripe for purchase. And the time to get keys to a Battersea property is now.
What exactly is moving and shaking south of the river?
After 25 years as an empty shell, Battersea Power Station is finally getting a £6bn facelift. Then, shortly after the first 3,400 power station homes become ready for occupancy in 2016 – 2,000 more properties will be completed at nearby Embassy Gardens.
If that wasn’t enough, in 2019 the whole area will go one step further when the Northern Line is extended and Battersea blessed with its first London Underground link – long touted as one of the main reasons the area has managed to stay relatively quiet despite its location in eyeshot of Chelsea until now.
As the transformation unfolds, scores of shops, boutique hotels and new offices are set to start relocating. House prices for miles will start rising and investment opportunities will be aplenty.
If all goes according to plan, Sean Mulryan Chairman and CEO of the The Ballymore Group, spearheading the Embassy Gardens development, expects Battersea’s Nine Elms district will go from an “inner city twilight zone to a shining example of world class urban redevelopment.”
A few years ago this would have sounded like delusional PR, but all indicators suggest he may well be right.
The £6m price tag for a Battersea power station penthouse or £343,000 for a lowly studio flat in the complex proved no deterrent for buyers earlier this month. Within days of hitting the market, the first 800 homes were sold as buyers scooped up £600m-worth of property, risking hypothermia outside the riverside sales office.
Source: Battersea Power Station
Across the road, the Embassy Gardens development, circling what will be the new American Embassy and the expected Northern Line underground link, has been equally encouraging. Since launching last year, it has become one of the world’s most successful developments to date, virtually selling out both tranches of homes and managing to secure an array of retail tenants.
“Embassy Gardens has sold its second tranche of properties and I expect interest will continue,” says Mayow Short, associate director at the Battersea branch of Savills estate agents. “We are seeing all this enthusiasm despite the fact that people will definitely not be moving in for a few years. And it is definitely not just foreign buyers. The first round of sales was dominated by overseas purchasers but once the area started getting attention, families and British expats, who have been living abroad, were keen to invest here.
“It is just going to keep getting better and better.”
The project is only scheduled for full completion in 2020 but that doesn’t mean that property prices are not already soaring. According to figures compiled by Savills, since the peak in 2007, Battersea property prices have gone up about 13%. Houses have appreciated the most, rising by 15.5%, with flats going up by 9.7%.
This falls short of so-called ultra-prime areas such as Kensington & Chelsea where prices are thought to have risen by as much as 20 to 30% in the same period. But Battersea is nonetheless seriously bucking the London trend. This time last year it was estimated that 50% of London’s postcodes had experienced depreciation, in some cases as large as 20%.
Since the new developments got ready to hit the market, the phones haven’t stopped ringing for Jeremy Raj, a property partner at London law firm Wedlake Bell.
“There is huge interest in these developments from Singapore, Hong Kong and China especially,” says Raj.
“I have already had inquiries from the representatives of wealthy individuals or families who are looking at the £3m-plus opportunities. But the wealthy across the globe are all potential buyers. I know from Indian and Chinese contacts, for example, that the studio and one bedroom options are appealing to wealthy parents looking to buy a flat as a home for a child studying in London.
“Battersea Power Station is both iconic and familiar to foreigners. Also, the rich in many Asian countries associate new build with quality. They are often more comfortable buying into a brand new development than a classic mansion block in Mayfair. My prediction is that this will sell out very, very quickly,” adds Raj.
What’s it like living in Battersea?
If you’re already a Battersea home owner, you’re likely to be pretty chuffed with the investment decisions you’ve made.
Kimberleigh Russell Welply, founder of fashion brand Boys & Horses, who bought a flat five years ago, couldn’t be happier. For a little over £300,000, she got a large, two-bed flat, with a garden, moments away from Battersea Park and Albert Bridge and she expects it to keep going up and up in value until at least 2019 when the tube opens.
“In terms of value for money, I couldn’t have bought what I did anywhere else I looked, like Parsons Green,” says Russell Welply. “The Embassy Development is exciting in terms of being a young professional who has invested. I’m thrilled we bought when we did.”
“There are already cool new restaurants opening all over the place, a growing art scene at the Royal College of Art – that has just had a whole new make-over and pub renovations – and I think there’s a buzzing sense of entrepreneurial ambition as people are setting up pop-up bars, galleries and even restaurants,” adds Welply.
But what about the rest of us looking for a part of London looking to sink our cash into – have we missed the Battersea bus (or should I say tube)?
Seemingly not. While the new developments may be out of our reach, this doesn’t mean that the Battersea market has achieved saturation like Chelsea.
“The area continues to be extremely exciting, with a broad range of opportunities and wide interest from a range of domestic, expat and international clients,” says Short of Savills.
“In recent years especially, as families have been priced out of Chelsea, where a lot of people are buying trophy homes, they have been moving over and th
is has created a very good, vibrant mix im the area.”
The results have been interesting. A sort of extremely high-end core Battersea zone, housing the Power Station has been created, with the new developments also raising interest in the traditionally popular period homes directly lining Battersea Park. The rise of this coveted central zone has in turn had a knock on effect by helping to diffuse interest south and east and is working to gentrify offshoot areas. A development domino effect if you will.
Source: Savills Battersea
The Battersea domino effect
“Battersea is spreading,” says Short. “Interest used to be concentrated on the modern developments along the river, and the mansion squares next to the park.
“Now, however, areas which were not so sought after are rising up. Little India to the south – starting around 2km south of the river – has become more popular. To the east toward Lambeth Bridge there are also some positive changes and additions,” he adds.
Short’s personal tip on ones to watch is a development in Page Mews, where eight of the nine two-to-four bed cottages were recently bought up for between £1.15m to almost £1.6m.
“That there was such interest in the area shows that there is a lot more development potential this side of the river, even away from the power station and embassy hub,” says Short. “After the success of Page Mews, I expect we will see similar developments popping up across the area.”
This previously rather undesirable location will in the next few years see the construction of the £50m New Covent Garden Market, the development of Europe’s tallest residential tower, One Nine Elms and the completion of a 1,870-strong residential complex at Nine Elms Parkside, built on top of land owned by the Royal Mail.
Little India too, which already has its own Northern Line links at Clapham Common is also appreciating.
Short thinks that property here would be a very good investment and the string of semi-detached houses in the area could be attractive for young families looking to buy their first home.
Charlie King, an account executive with PR firm Keslo Consulting, who rents in Battersea is worried he might have to leave but also sees the opportunity ahead.
“I have lived in Battersea for almost 18 months now and can’t think of another place in London where I would like to live,” says King.
“However, I do see there being problems in the years to come, especially with regards to house prices. I know myself and friends who would love to stay in Battersea, but will be forced to move elsewhere in order to buy.
“If Battersea reaches its peak though, other areas close by such as Earsfield will benefit from the Battersea overflow,” he adds.
Battersea business zone
And it is not just homes, commercial space throughout Battersea is also expected to rise in value as property prices increase generally and more homes spring up.
“It is still too early to quantify in figures what impact the development has had on local commercial rents and what impact the development will have on rents in the future,” says Keith Holihead, senior property consultant at Hudsons Property. “However, in our opinion, the developments… can only be seen as a positive. This is likely to increase demand for commercial space which will have a positive effect on rents as well as demand for freeholds as investors jump on to the band wagon, increasing capital values.”
The driving force behind one of Battersea’s biggest institutions – the Affordable Art Fair – is on board, even if it does sees uncertain times ahead.
“…Footfall and revenue for the 120 exhibiting galleries could rise, but costs of renting the space may rise too. We certainly hope to be there for many years to come, but we will have to wait and see,” says fair director Nicky Wheeler.
The fair already brings in more than 20,000 visitors and sees sales of more than £4.5m but hopes it will get even more popular.
“However, many of our visitors live within five miles of Battersea and I imagine the changes coming to the area will help introduce a new audience to the Affordable Art Fair. I’m sure the new residents will want to put some exciting contemporary artwork on their walls!”
So whether you’re a wannabe homeowner, or a commercial letter, Battersea, and crucially certain surrounding areas, still offer plenty of property promise – even if you’re not thinking £6m penthouse kind of big.