Investors keen to buy into the hottest London property development opportunities may want to look at the Shoreditch area of the capital, with a new report noting that this is set to be transformed into a ‘mini Bond Street’ over the next few years.
According to Reuters, while the area, which is located just to the east of the heart of London, is currently ‘edgy’, high-end retailers such as Ralph Lauren and Vivienne Westwood are now eyeing up new business opportunities there.
This could mean that Shoreditch is transformed into an affluent neighbourhood with high rents and high-earning residents within the space of just five years.
Indeed, one landlord with five properties in the area told the news agency that it is like the Meatpacking District in New York City, in that it is on the verge of being transformed from a slightly dodgy, undesirable area into one of the city’s most attractive postcodes.
Notably, as well as the prospect of luxury fashion houses setting up shop, it is anticipated that the recent arrival of Google will help drive London property development in this part of the city.
The internet giant’s decision to set up a technology hub in the east of the capital was welcomed as “great news” by the chancellor George Osborne at the end of last month.
London Property Market News
People who work in the city have been advised of the financial sense it makes to target residential property some distance from their office, reports UK Business Property.
New research by Halifax has found that those who catch the train to London each day will pay 60 per cent less for their home than they would if they lived in the capital.
Venturing an hour out of the city will save about £375,000 on a property – meaning it is well worth doing so, as the average train fare is £4,400 a year.
Towns to be recommended by the financial organisation include the likes of Peterborough, Swindon and Rochester.
In these spots, residential property is worth an average of £245,000, compared to £620,000 in London.
Nitesh Patel, housing economist at Halifax, commented: “Commuters to London tend to get a lot more for their money than in central London; bigger houses for lower prices.”
Parents living in the capital city appear to want their children to have the option to have London property to rent.
New research by LV= has revealed that property is the asset parents most want to be able to pass on to their children. This was narrowly followed by money.
The survey also found that 25 per cent of people in Britain do not expect to receive any financial inheritance, while 42 per cent are not banking on inheritance to help bolster their financial situation.
John Perks, managing director of Retirement Solutions at the insurance firm, said: “This research highlights a disparity between the number of Brits who are planning to leave some kind of financial asset behind for their family and those who believe there will anything left for them to inherit – this suggests that many may be pleasantly surprised.”
However, he warned that it is important for people planning to leave inheritance to seek expert advice on the relevant financial products that can help, while making a will “as early as possible”.
London Rental Property News
>Energy Performance Certificates (EPCs) are having little impact on prospective homeowners, research by Consumer Focus has found.
A survey by the watchdog found 80 per cent of those looking for new homes to buy or rent would not be influenced by a property’s EPC, despite one in seven people stating that their new home’s energy efficiency is the most important aspect to them.
Landlords and homeowners are legally required to provide an EPC when letting or selling a home.
Spencer Lawrence, director of lettings at Paramount, pointed out: “Tenants select rental properties based on various factors including proposed rent, location and condition.
“The information contained within an EPC does not in our experience have any bearing on a tenant’s decision to take one apartment over another – it doesn’t seem to be part of their thought process, so its place in the market is unclear,” he added.
Meanwhile, the government has announced that accredited Green Deal providers will be able to approach properties with EPCs to offer tailored advice.
Landlord and Tenant News
>North West London property prices on the “Jubilee line corridor” have risen faster than other areas of London.
Property prices on the “Jubilee line corridor” of north west London have recovered faster since the crash than in any other part of London, according to research. from Zoopla. St John’s Wood NW8 tops the list of London postcodes where property prices have now passed their 2007 peaks. The average St John’s Wood home is valued at £888,840, almost seven per cent above property prices in September 2007, according to a new house price survey.
London property prices fell 20 per cent or more in the wake of the credit crunch. Property prices are now above their peaks of September 2007 in 22 of the capital’s 154 postcodes according to a London property price survey conducted by UK property website, Zoopla.
Of the top 12 London postcodes, five property price hot spots are on the Jubilee line which runs through North West London to the West End, The City and Docklands.- St John’s Wood; NW2 (served by Dollis Hill and Neasden stations), NW3 (Swiss Cottage), NW6 (Kilburn and West Hampstead), and NW10 (Willesden Green).
>High end property sales and rentals are becoming the focus of many London home buyers, according to London Central Portfolio.
Naomi Heaton, chief executive of the company, commented that location is the most important priority for many prospective homeowners looking for property to buy in London.
“Investors looking to place their money in blue chip tangible assets want to buy the best real estate available,” she explained.
“The savvy investor will be looking at the prime postcodes around Hyde Park – areas like Kensington, Chelsea, Mayfair, Marylebone and Knightsbridge.”
Ms Heaton noted that those interested in rental yields and returns in London will be looking for good value, well-presented one and two-bedroom flats – “this is where the astute investor should focus”.
Her comments come in light of research from Savills showing that average prime London rents increased by 11.5 per cent in 2010.
Consequently, rents are expected to grow this year by an average of eight per cent across prime London and seven per cent in prime central zones.
London Housing Market News
>Bonuses ‘Will Not’ Have Significant Affect on Property Market reports Ipin.
London banker’s bonuses are not expected to have as great an influence on the UK property market as first believed, it has been suggested. Leading property portal Sourcing Property remains unconvinced about the impact that this years’ bonuses will have.
The firm explained that the biggest bonuses tended only to be reserved for the company’s top performers, rather than the organisations as a whole.
In addition, Jo Eccles, director of Sourcing Property, said that the fact that bonuses are not paid in 100 per cent cash will also prevent some from investing.
“What is most likely to affect the spring market is the introduction of the five per cent stamp duty on purchases over GBP 1 million which comes into force on April 6th this year. This is likely to lead to heightened activity at the top end of the market in the run up to April 6th,” she added.
Ms Eccles added that inflation concerns are also having an impact on the market, with a number of individuals keen to invest in property rather than have their cash sitting in the bank eroding in value.
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>Property situated near London Cycle Hire docking stations are enjoying a boost in demand, as more and more Londoners are taking to cycling.
Cycle Hire docking stations and Cycle Superhighways are helping to drive up prices of property in their vicinity, according to a report in the Evening Standard newspaper.
“Demand for property for rent around docking stations and cycle routes has gone up by about a third in the past year, and has been soaring since the launch of the cycle hire scheme”
The London Cycle Hire scheme has been hailed a success since its launch on 30 July, with the system already struggling to cope with the demand – helped along by the recent London Underground strikes.
Transport for London are currently looking into expanding the scheme outside central London, which currently has 5,000 hire cycles spread between 315 docking stations. Around 70,000 have already subscribed to the scheme.
Most residential landlords are still positive about the prospects of the country’s buy-to-let sector, but according to a survey conducted by CHL Mortgages, uncertainty has risen noticeably, compared to figures published six months ago. In fact, 81% of landlords believed that the sector was headed in the right direction in late January, but the newest CHL study found that this figure slipped to 64%.
Additionally, one in four landlords indicated that they were uncertain about the sector’s prospects in the near future, representing a significant increase from the much lower 9% figure published at the beginning of the year. This drop in confidence may have a significant impact on residential property sales, as the number of landlords looking to add to their portfolio has dropped to 28%. This represents a 10% decrease from the last survey. As such, the supply of rental properties may continue to lag behind the strong demand that currently characterizes the buy-to-let sector.
There is a clear reason as to why more landlords no longer plan to purchase new properties. Many have expressed frustration over the fact that buy-to-let lending has not yet recovered. Bob Young, CHL’s managing director, noted that many landlords would prefer more flexible deposit regulations, thus decreasing the amount necessary to obtain a mortgage.
While fewer landlords are looking to purchase new properties, a clear majority intends to keep its current real estate and does not plan to sell. While 53% of landlords said that they would not sell back in January, this figure now stands at 66%.
