The Shoreditch district leads East End’s ‘gentrification’ charge.
Transport upgrades, regeneration and new homes developments bring fresh vitality to London areas that may still be under the radar – making them good places to buy during this stage of the upward curve. Until recently, London’s East End has historically underperformed relative to traditional prime locations across all UK property sectors. But according to a report by property agents CBRE, three areas in the East End are now seeing high growth:
– Shoreditch / Hoxton – 24 percent three year increase in property prices
– Clerkenwell – 53 percent three-year house price growth
– Bethnal Green – 25 percent three-year increase in prices
If these trends continue, residential prices in the East End will reach those in prime boroughs in five years’ time.
Arrival of Crossrail
CBRE continues: “The impact of Crossrail cannot be underestimated particularly in the Eastern City Fringe which will benefit from three major stations, Farringdon, Liverpool Street and Whitechapel”.
Farringdon as an example will become the UK’s busiest station with 140 trains per hour. This significant enhancement of Farringdon’s connectivity has already had a noticeable impact on the office market, boosting its appeal among occupiers particularly in the technology, media and telecoms sector. The rapid pace and scale of change will also boost the residential offering both in terms of appeal of current stock and by attracting more high-end developers. House prices are expected to surge in this area by an average of 5.0 percent per year until Crossrail becomes operational in 2018, on top of underlying growth.
30 Old Street – one of the City’s most transformative developments – a master class in modern day architecture – is poised to take advantage of these transport upgrades. Positioned almost equidistant from the underground and national railway stations of Farringdon and the eponymous Old Street – a nine and eight minute walk respectively – with access to the Circle, Hammersmith and City, Metropolitan and Northern lines. An exciting new development of eight apartments arranged over the first to fifth floors. Due for completion in Autumn 2015, this development features six two-bedroom apartments arranged over the first, second and third floors, and two three-bedroom duplex apartments arranged over the fourth and fifth floors of the building.
The building is located on the Clerkenwell end of Old Street which has become a known destination for showroom and fashion operators, hosting the Clerkenwell Design Week year on year. With great expansion scheduled for Farringdon in 2018 – both the Crossrail, (linking London’s east and west) and the Thameslink Programme (connecting north and south) will make it the only station where commuters can access both lines, cementing Old Street as an excellent base from which to navigate the whole of greater London. Matt Cobb, Director at Hatton Real Estate said, “All of the above will help transform Old Street into a location that in our opinion will rival established areas such as Covent Garden/Soho as a place where people want to live, work and play.”
Changing mind-sets
It is the transport upgrades and ‘gentrification’ of East London that is changing the mindset of Asian buyers who have previously been quite skeptical of East London as there are still parts which are very urban and still retain that ‘gritty’ feel which can be misconceived as being rough. Cobb added: “This mind-set has definitely changed though due to existing and future improved transport infrastructure such as Crossrail Liverpool St, new high end retail, new hotels such as The Nobu Hotel, Ace and The Boundary, high-end restaurants etc. Whilst areas in East London such as Shoreditch and Hoxton are no longer cheap, they still represent good value for money when appreciating due to close proximity to the City and when making a comparison with so called golden postcodes in the West.”
Shoreditch is fast cementing its reputation as London’s centre of sophistication and refinement. Over the past decade, the area has evolved into a shopping destination to rival the well-known spending meccas of the West End. Designer boutiques, independent retailers and larger brands take their place in the surrounding area, providing limitless options and exclusive shopping locations. Parisian label A.P.C. has recently moved into the area, highlighting the influx of top fashion designers who call the East End their home. Baartmans and Siegel, Christopher Kane and Giles Deacon are just some of the high profile names that are all based in and around Shoreditch.
Capital of cool
East London is synonymous with cool. Always favoured by a diverse range of residents from mixed professions and social classes, it has risen in popularity over the last decade due to its creative arts scene, excellent transport infrastructure, proximity to the financial districts and its choice of open green space.
Natalie Hall, Sales & Marketing Director at Londonewcastle states: “Unlike West London, its streets are more patchwork than uniform and it’s this architectural imperfection which makes it such an interesting place to live and work. In Spitalfields for example, converted warehouses sit alongside Huguenot townhouses, reminiscent of Dickensian London, further east, modern new developments tower above modest workmen’s cottages. Even though some areas of East London are no longer the ‘affordable’ boroughs they once were, there are still pockets of investment opportunity where property is some 15 – 20 percent less than its neighbours – an example of this is Hackney Wick Vs Victoria Park, the former being an area earmarked for redevelopment under the watchful eyes of the London Legacy Development Corporation.
“Areas directly affected by Crossrail, such as Whitechapel have already seen some growth factored into the pricing, however it remains a sound investment given the amount of redevelopment surrounding the hospital coupled with its proximity to The City.”
Boosted by a combination of new-build and regenerated properties, as well as the arrival of appealing lifestyle amenities, the once-forgotten neighbourhoods of Shoreditch and Clerkenwell are at the core of a real estate revival that extends beyond the prime London locales. This is an area not just a place for rental investment, East London is a fantastic area in which to live.
Image: Skyline of the Canary Wharf financial district in East London. (Photo by CGP Grey; Wikimedia Commons)
Sources: hattonrealestate.co.uk, londonewcastle.com
Things to know about the London lettings market, finance and furnishing new builds
– Where is the next residential Hotspot?
East London and the Docklands are still firmly on everyone’s lips and it remains very popular with investors and tenants alike. With relatively cheaper rents (for tenants) and potential yields of four percent+ (for the investor) it isn’t hard to see why.
Our Canary Wharf office just had an amazing success in Canning Town with the Hallsville Quarter where we have 19 units under offer, or let, in less than two weeks.
Slightly west of this is of course Canary Wharf, where there are some revolutionary residential blocks being built to change the focus from commercial to residential. Lookout for 10 Park Drive.
– Have any particular trends emerged recently in the London rental market?
With the wealth of new build developments completing in the capital we have seen a real surge in enquiries for new, lifestyle apartments. As demographics and markets change and younger professionals are looking to rent, rather than buy, there is an increased demand for new builds, especially with facilities such as gyms and swimming pools.
– What are the current opportunities for finance products?
The Bank of England may have made no change to the base rate this month, keeping it at a record low of 0.5 percent, but mortgage lenders have been cutting their mortgage rates aggressively. In a bid to attract customers, banks and building societies are offering ever lower fixed rates on their home loans, with some fiveyear fixes now pegged at just over 2.0 percent and mortgages fixed for ten years from around 3.0 percent interest. Knight Frank Finance is always available for a free, no obligation and consultation.
– What advice do you have for landlords with regards to furnishing?
Ninety percent of all Knight Frank new builds are let furnished, so it is very important to get the furnishing solution correct. With more and more competition it is imperative to use the highest quality products that make an apartment “stand out from the crowd”. Knight Frank Interiors offer various furniture packs to suit every budget ranging from investor, to platinum packages.
Article contributed by Freddie Hills, Senior Consultant in Knight Frank’s Customer Care team.
INTERNATIONAL HIGHLIGHT
Our selection of two stunning new developments for sale in East London.
Royal Arsenal Riverside
Woolwich, London SE18
Type: Apartment
Developer: Berkeley Homes
Tenure: 999-year leasehold
Facilities: Residents’ gym, 20m swimming pool, 24-hour concierge, cinema room.
Nearby Key Amenities: Established universities such as University College London and The London School of Economics. Upcoming retail hub, medical centre and pharmacy on-site.
Nearby Transport: Woolwich Arsenal tube station. Future Crossrail station on-site.
Average Price (psf): £800
Located on the banks of the River Thames in South East London, Royal Arsenal Riverside sits on an 88 acre site that will offer around 5,000 new homes when completed.
Comprising a mix of historic listed buildings and striking new developments, this mixed-use development has been designed to cater to the needs of consumers who want to work, study or live close to the heart of London, but also aspire for a calm and relaxing environment, with lots of greenery close to the river.
A range of first-class facilities will be available to residents including a 24-hour concierge service, future hotel, and fully-equipped gymnasium. With the upcoming on-site Crossrail station, transport links to the area are set to be enhanced, with the existing National Rail and DLR station only 300m away.
Maine Tower, Harbour Central
Millharbour, London E14
Type: Apartment
Developer: Galliard Homes
Tenure: 999-year leasehold
Facilities: Private cinema room, health spa, gym, 24-hour concierge desk.
Nearby Key Amenities: Offices, shops, restaurants, bars and parks in Canary Wharf.
Nearby Transport: Canary Wharf underground station. Crossrail opening in 2018.
Average Price (psf): £1,100
Rising 41 storeys high, Maine Tower is located in the heart of Canary Wharf, a global financial centre. It is within proximity to the Thames Clipper river bus, DLR, Jubilee Line and the much-anticipated Crossrail 2018.
The development boasts a mix of studio, one, two and three-bedroom apartments, with many of the high floor units offering panoramic views of the London skyline. Residents will enjoy a slew of facilities such as a 24-hour concierge desk, private cinema room, health spa, gym, club lounge, library and champagne bar.
With Qatari Sovereign Wealth recently acquiring the entire Canary Wharf estate at a cost of £2.6 billion; diversifying the financial centric area into the largest financial technology centre, the size and workforce is bound to double ensuring good rental returns and capital growth potential.
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