Here’s the new property hotspot
For too long London has been dominated by a few prestigious postcodes. The mere mention of Chelsea, Kensington, Knightsbridge and Mayfair has been enough to get our pulses racing and the chequebooks of the rich and famous snapping open and signing up zeros.
These traditional hotspots may not be going anywhere, but an up-and-coming part of London has begun giving them all a run for their money. No. We’re not talking Shoreditch, or Islington, but the Thames.
Ok, the Thames isn’t technically a postcode, but it’s seen as sufficiently homogeneous to be treated as one by some of London’s biggest estate agents. Knight Frank and Savills both have Riverside departments that specialise in the 40-mile-or-so stretch that spans the length of London’s river banks, from Richmond to Greenwich. And investors have chosen chunks of the river as ground zero for their development projects, with homeowners loyally following suit.
The result has been an overreaching boom in Riverside prices, from east to west, with the last four years being particularly bullish for Property-Upon-Thames. Knight Frank now sees “the Riverside” postcode as having some of the best growth rates in the capital.
Prices in some Battersea riverside apartments with full river views are up as much as 30% in just 18 months, and the Nine Elms riverside stretch is projected to shoot up about 40% annually over the next few years. Certain micro-pockets near the Bankside are also booming, with some new developments rising from as much as £550psf up to £2,000psf in just a few years.
The rental market is equally buoyant – Knight Frank Riverside has reported an overall 22% year-on-year rise in the number of wealthy student and corporate client tenants. This is good news for potential investors and current homeowners alike.
Riding the riverside property train for life: Starting out East, and floating West
As a property destination, the Thames – or at least some parts of it – has always been popular. There is something about living on the water that just draws people in. And where people go, shops, restaurants and other amenities tend to follow.
This riverside property buzz was once restricted to West London, but a boom in riverside development over the last few decades has brought more diversity and lengthened the investment arc in both directions.
As the Thames works its way through London, it first flows past the beautiful old Georgian houses out west, where luxury riverside living was first conceived, before passing through swankier new developments on its way to Chelsea. It then twists round the ultra-luxury pads for the City boys and gals’ and minor foreign royals in central London, before arriving at the large-scale modern apartment blocks that have reclaimed the Docklands from its former industrial exile.
These different kinds of properties may seem incompatible, but they have more in common than one would expect. Riverside buyers, whether from five-storey houses in Richmond or two-bed penthouses in Surrey Quays, often cite the same reasons for buying. All crave the views, the light, the investment value and the neighbouring amenities.
These are shared by much of the Thames riverbank and have allowed a unique investment cycle to form. Londoners that choose to become riversiders rarely want to stop being riversiders – even if they end up changing where on the river they live.
“A riverside pattern emerges. People who get their first bonuses look to the developments in East London – Greenwich or Surrey Quays maybe,” says Fran Moynihan, a negotiator at Savills Waterfront.
“Then, once they are better established they will upgrade to a central riverside location. Once they start a family they will move further west, but they will always stay by the river.
“The cycle comes full circle when people look for buy-to-rent properties or want to downsize to help their children get a place. Then they will turn to the larger developments on the East side of London again. It’s a conveyor belt of investment.”
Riverside living phase one: getting your own Docklands home
When Canary Wharf underwent its major revamp in the early 1990s, scores of young City workers and other Londoners chose to set up shop there, attracted by the promise of better things to come. Today’s 20 and early 30-somethings are doing much the same, albeit a little bit further down the road in places like Surrey Quays, Rotherhithe and increasingly Greenwich – the first stage of the riverside conveyor belt.
Preston Benson, commercial director at property investment company Bursha Holdings, which specialises in high-end Central London properties, has just bought his first home in a Surrey Quays waterside development.
“Riverside property is at the centre of London life,” says the 32-year-old. “People have been hesitant to look to the Docklands, regarding them as historically underdeveloped – but this is changing quickly.”
“For about £500psf here, compared to £3,000psf in Central London, one can get great amenities like gyms on site and good views of the river,” says Benson.
“The property prices in this part of town may not rise as quickly as prime areas but they are currently undervalued, so they remain extremely attractive areas to invest.”
And invest is what everyone is doing. British Land is currently erecting a £32m project in Surrey Quays which will see 1,000 new homes, while in Rotherhithe, developers Berkeley’s, Barratts and Higgins Home have all been busy building.
Riverside living phase II: reaching property cloud nine in Central London
Even with the buzz surrounding the Thames’ eastern stretch, it still isn’t everyone’s piece of property porn. Once the City boys and girls grow to be bigwigs, many want to upgrade to traditional Central London locations, still primped with better views, better amenities, better restaurants and possibly a celebrity neighbour or two.
The latest must-have properties therefore tend to be located somewhere closer to the Square Mile and London’s cultural hubs like the Southbank.
Berkeley Home’s One Tower Bridge, where prices start at £850,000, is seen as this year’s “it” venture, while St James’s Albert Embankment mixed-purpose development, designed by Foster + Partners, is also attracting a lot of attention. It is due for demolition later this year and should be completed by 2017.
According to Knight Frank’s research, prices in the South Bank have risen by 44% since March 2009 compared to a recovery of 37% in prime central London as a whole, largely because of the prevalence of river views and access.
This kind of lifestyle, however, remains the preserve of the ultra-wealthy few, which is why Central London property concepts have trickled further down the river. Not too far down stream, Nine Elms and Battersea are witnessing a major revamp, largely thanks to the desirability of their Thames location.
Much has already been written abo
ut the multi-billion-pound Battersea Power Station redevelopment – despite asking prices starting at £370,000 for a studio, the site virtually sold out in a matter of months – but its success has encouraged a flurry of smaller projects.
Berkeley’s Merrano Residences in Nine Elms, for instance, now looks likely to go ahead, with daughter company St James’ actively looking for other similar opportunities.
The same is true in older sites. Some apartments with Thames views in the Albion Riverside have risen by as much as 30% in the last 18 months alone, while average prices on the street have gone up 10% in three years, according to property comparison site Zoopla.
But this is only a preview of bigger things to come, with Knight Frank forecasting property values in the area to go up some 140% by 2016, partly rallied by the explosion in riverside real estate.
With this in mind, several properties are expected to perform particularly well. Battersea Reach in particular is seen as a good investment, as is the newer Montevetro building on the river. Both are thought to be undervalued, despite getting a lot of buyer interest.
Across the Thames in Fulham, prices are rising too. In a recent report, property market specialists CBRE foresaw Fulham waterside entering London’s prime London property ring within the next 18 months, ahead of the rest of the area.
Riverside living phase III: Retirement and reinvestment
Fine dining and fun times it may be, but few think Central London apartments are great places to raise kids, even if your little darlings can spend all day gazing at boats.
This pushes riversiders to carry on their westward journey and to settle in places like Chiswick, Richmond and Kingston.
The large-scale development train ends here, at least for now, but it is by no means the end of the line. Smaller, boutique modern homes have been springing up.
Riverside Lodge, a small development of five-bedroom house on Chiswick Mall is a perfect example. At £4.25m, the houses are about as much as an inner city penthouse, and are being marketed to former City kids, with kids of their own, who are reluctant to abandon the perks of Thames-side living.
Prices here rise less quickly than in central locations, but they have nonetheless gone up by more than 5% over the last three years, with houses on the river being viewed as a very safe bet.
Christopher Bramwell, head of Savills Chiswick, estimates that a waterside view in his area of London is so coveted that in the current market your home would sell for a 25% mark-up, compared to houses just street away.
“There is a shortage of properties and very high demand, which helps keep prices high,” says Bramwell. “It is extremely popular with families and all those wanting a bit more outdoor space and a country-like feel, while still being in London.”
But there is a catch. The large majority of the houses in this part of riverside London are Georgian or even older. Majestic, but in need of maintenance.
This means that while they are timeless nest eggs, they can weigh down their owners and are not always the perfect end to your property transition. The river only intensifies normal house issues like damp and mould and means that upkeep here can be become a drag, especially once owners look to retire, or want to spend more time abroad.
This is where the east-end riverside rears its head again.
“The large variety of existing and upcoming developments [in central and east riverside] are the perfect investment and are good to lock-up-and-leave,” says Savills’ Moynihan.
This attracts people who want to get a little extra income by buy-to-renting, those who want to downsize to a more convenient location, and those who would like to help their kids get their first hold on the property ladder.
Keeping the riverside conveyor belt spinning
This has all allowed the riverside property conveyor belt to keep on ticking nicely, but in recent years the cycle has become supercharged, spurred on by exploding property demand, improved transportation links and growing government and private investment.
Foreign buyers, who now own account for more than 50% of London’s prime market, and almost 75% of all new build purchases, have been central to this acceleration. They view the river as a big pull factor and have been buying up new builds from Battersea to Surrey Quays – either purely for investment purposes or to use as second homes or homes for their children, many of whom study in the UK.
Brits too have become hungrier for the modern riverside dream. Expats returning from stints abroad and younger professionals, keen to get the perks like communal pools or reduce their commutes, have all flocked to the Thames.
“The riverside really began taking off as a location about three years ago,” says head of Knight Frank’s riverside sales department Matthew Smith. “People have always liked the idea of it but the great amenities have only started to come in more recently as developers responded to this demand.”
Instead of just building big residential developments, developers realised that mix-purpose builds made whole areas more attractive. Restaurants, spas and shops have all subsequently sprung up. To boot, developers expanded their involvement and began providing management contracts, which have allowed owners to live there part-time, or to rent out the property, safe in the knowledge that if something goes wrong, someone else will clean up the mess – a particularly attractive perk for all those overseas investors.
The recent relaxation of planning laws, which have made it easier to convert old office blocks into residential space, are also helping developers get their hands on previously forbidden parts of the river. Berkeley’s Merrano Residences in Nine Elms, for instance, now looks likely to go ahead due to the changes, with similar conversions expected along the river soon.
Much of this change, however, has been made possible because of imrpoved transportation links.
The arrival of Crossrail in 2018, not to mention the expansion of the Jubilee Line, the DLR and the Overground, have all made the river more attractive, although Thames travel is possibly the most promising of all.
Most of us either don’t use or don’t know about London’s boat links but Mayor Boris Johnson has pledged to change all that, vowing to refurbish key stations by 2013 and double the number of riverside passenger by 2020.
Planning permission has already been granted at Plantation Wharf in Wandsworth, Enderby Wharf in Greenwich and Nine Elms in Battersea. A string of stops spanning from Wapping to Barking are also being considered, as is a fusion of the western part of London’s boat service with the eastern of the service.
Once that happens, the Riverside will further cement its reputation as a unique thriving ecosystem. Isn’t it about time you got on board?
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