How London got its latest property hot spot
The UK may suffer from the notorious North-South divide, but London’s split has always been squarely East-West.
For years, the East monopolised the concept of “up-and-coming” London living, with property prices fast shedding their lowly beginnings, as whole areas catapulted themselves to prime middle-class stardom.
There was Dalston and Hackney, and then even Stratford. Meanwhile, down south, Southwark and London Bridge boomed their way up the London property wish list.
But for the last 18 months, the tide has been turning. More and more buyers, investors and developers are looking West to get the best deals. Ealing, with its parks, schools and fast-improving transport links is quickly establishing itself as the poster child of this westerly regeneration.
In just six months, property prices have shot up 5%, says Narendra Gandhi, partner at Winkworth’s estate agents in Ealing. Over the same period, London prices rose by around 2.5%, while national prices (including London) stood at 1.6%, largely thanks to a buoyant December.
In some cases, properties have gone for 25% more than they did just two years ago, says John Martin, founder of John Martin Estates in Ealing. And things only look to get better,
With Crossrail expected to open in 2018 and slash travel times to Central London, and various schemes like the £100m Cinema Square complex rising up, shrewder investors have already cast their gaze westward and are betting Ealing may soon eclipse more popular neighbourhoods like Chiswick and Shepherds Bush, long seen as bastions of West London yummy mummydom.
New property developments galore in Ealing
Ealing, with its sprawling parks, ample parking spaces and spacious period houses, may seem like a rather random place to frantically start building up – why on earth do you need to be two-dozen-storeys up in the depths of West London? But high rises are taking Ealing by storm and these new developments are proving to be a major component of Ealing’s property boom, bringing in a mix of young professionals and foreign buyers to complement the area’s more traditional family demand.
At the heart of the new building craze is Dickens Yard, a nearly 700-strong apartment complex, kitted with a gym and spa and lined with boulevard-like streets, expected to be filled with designer shops and niche eateries.
With prices starting from £320,000 for a studio and going up to several million for its penthouses, the development does not come cheap, especially for Ealing. Yet Ian Dobie, West London managing director of St George, the developers behind the scheme, insists that the response has been “fantastic”.
Panoramic views over much of London, reaching all the way to the City in the East and Wembley in the North are a major pull, but so is the ease and convenience of having everything either in the building or right on your doorstep, explains St George. With Liverpool Street soon just 19 minutes away, Heathrow less than 15 and Canary Wharf a mere 29 minutes, Ealing’s location is expected to become one of its biggest attractions.
Crossrail predicts that Ealing, alongside a small selection of other outer London areas, will see a “significant property” boost, scooping up a serious chunk of the £5.5bn total London-wide boost expected thanks to the rail project.
But while St George may have been among the first to spot Ealing’s rising star, they have by no means been the only.
The 21-storery Apex development just off Uxbridge Road is another high riser in Ealing’s otherwise flat skyline. With over 90 apartments in the Apex Tower, plus an affordable housing project Garden Court standing side by side, developers Frep and Galliard Homes are expecting to hit it big before the site gears up for occupancy in late 2014.
“There is quite bit of interest,” says Winkworth’s Gandhi. “The Apex will have to compete with the liked of Dickens Yard but it is an attractive looking building and I think it will do well.”
Nor are popular new builds just soaring upward. Various purpose-built townhouse developments are also springing up. The St Mary’s Mews gated community, where four-bedroom homes are on the market for almost £1.4m is selling fast. “As we approach the spring market I expect them to go,” says Gandhi.
Spurred on by the residential demand, retailers too are slowly filtering in. This month, developers British Land splashed out £143m to acquire Ealing Broadway Shopping Centre, while restaurants like Wagamama have also opened and the Cinema Square started construction.
“We believe there are significant opportunities to grow and develop the shopping centre as a retail destination, both as we further improve the retail mix and increase the leisure offer and as the area benefits from residential development and the completion of Crossrail,” Charles Maudsley, British Land’s head of retail, said about the Ealing acquisition.
Ealing: rising from the ashes
What’s emerging now is a world away from what we saw just 18 months ago when Ealing was ravaged in the London riots, its shops set alight and looted, its residents pushed to the brink of relocation.
The unrest seemed to showcase to the world what many residents had long complained about – that commerce was disappearing and the gap between rich and poor growing more pronounced.
Back then, it was unclear whether Ealing would be able to rise from the ashes, and whether its period of relative decline, sparked by the opening of Westfield in Shepherd’s Bush, would become irreversible.
“Westfield killed Ealing,” says John Martin Estates’ Martin. “Since then we have had a huge problem with empty shops, which isn’t something that we had before. That in itself is causing us problems, but Ealing Council has been very slow to react.”
Out-of-town shoppers, coming from further West, had long been central to Ealing’s economy but they were soon wooed by the high-end retail promise of Westfield. As they started travelling that little bit further, many shops started follow suit, just at the time when the recession started to enact its toll.
Were it not for a sustained government and private push to revitalise the area, things may have continued to deteriorate. But 2011 marked a turning point for the better.
“Ealing took a real psychological knock with the riots, and retail was affected by Westfield – but Ealing is really bouncing back,” says “happy Ealingite” and father-of-two Russ Lidstone, who heads advertising firm Havas Worldwide. “There is now an even stronger community feel, more interesting
retail development, richer cultural events and a brilliant multi-cultural atmosphere.”
In the last 18 months, London Mayor Boris Johnson has funnelled millions into the West London borough through his Outer London Fund and his post-riot £50m town rejuvenation fund. In late 2012, he went further, pledging an additional £5.2m to aid transport and infrastructure.
The incoming westward property rush
Long-time resident and Ealing property investor Simon Duncan believes that the time is finally right to start purchasing buy-to-rent properties again.
After scoring his first Ealing flat in 2002, Duncan, the director at Ealing-based online marketing agency, Zone One Marketing, went on to buy his next Ealing property in 2003, then a third in 2005, before buying a new family home in Ealing, without selling his old one.
The properties had tenants year-round and were steadily appreciating during the pre-recession years, although Duncan has held back from investing in a fifth Ealing property since the credit crunch. But with his first flat now up 100% on its purchase price and the remaining properties up at least 30%, Duncan thinks the “time is right” to get back in the Ealing game.
“In terms of rental, it has never been better,” says Duncan. “You hear all this negative national news but you have to realise that London does not have enough property in general. This city is going mad and bursting at the seams.
“In my area we have three primary schools that have 120 kids in each year. When I was a kid it was 30 – this shows just how crazy it has become.”
This growing demand, coupled with what is still a relatively limited building supply, has spelt good news for some, but not all.
Martin insists that the market is being distorted by rich investors that buy up properties en mass, phasing out the more traditional family buyers, long central to Ealing’s cosy and familiar feel that lasted even during tougher economic times.
“There has been a lot of demand but in some ways that is proving to be our biggest problem,” says Martin. “New properties are coming onto the market, but in general there is not enough stock. Then when the stock is there, people are having a hard time getting financing because all the demand is pushing up prices.
“This is forcing a number of individuals to stay put because they cannot buy up, even if their original home has gone up in price too. And it’s not just families looking to expand; the bottom of the market is seeing extremely fierce competition.”
Investors then depend on high rents to pay off mortgages, creating a further drift between property owners and letters, and undermining the area’s long-term future, he explains.
For the last five to seven years they have been “raising rents practically every day,” and now tenants, who have been in Ealing for years – including young families and professionals – are finding that they are “squeezed to the maximum”. So while other indicators suggest that rents should keep rising, Martin says he has started noticing a small downward trend. In the short term he predicts that growing numbers will decide to move or downsize but in the medium term he believes rental prices may stall their bullish trajectory.
All eyes ahead for Crossrail
For the downsides, opportunities are still aplenty in Ealing. The attractions are similar to Chiswick and Shepherd’s Bush, but Ealing is still 25% less expensive on average, explains Winkworth’s Gandhi.
“Relatively speaking, Ealing is still very good value for money and means that you can get a lot more for your invenstment,” says Gandhi.
Owing to the growing demand and relative affordability, Ealing’s less affluent areas are starting to be phased out. “Whereas a couple of years ago there were still a few less desirable pockets around Ealing’s residential areas, we are seeing these start to disappear,” says Gandhi.
Instead of just converting houses to flats, the fad to reconvert family houses and revamp older homes is also thriving, he says. This is offering a big boost to existing Ealing homeowners, Gandhi adds.
And once Crossrail opens, the prices across the board are set to soar higher still, further closing the gap with well-to-do areas of West London.
So watch out East London: Ealing is back, and it’s helping steal back West London’s property prowess.
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