I recently visited London for the first time in eleven years after having previously lived in the capital for more than four years. Honestly I didn’t expect to see much change since my time there, however I was more than pleasantly surprised to discover that London is booming especially zone 1, zone 2, and zone 3! So much so that it’s difficult to even know where to begin!
Fifteen years ago I spent much of my work and social time in the bars, cafes and restaurants in and around the south side of London. The area is now almost unrecognisable thanks mainly to the recent completion of Europe’s tallest building The Shard which not only forms an impressive new addition to London’s skyline but has enabled the transformation of the entire district at its doorway. The area has been re-branded ‘London Bridge Quarter’ and now boasts a wonderful array of new restaurants, cafes and bars.
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After a 3 minute walk I arrived at Borough market, which used to be exactly what you would expect it to be – a market. However many of the old market stalls and trading shops under the railway line have given way to chic restaurants and trendy cafes not to mention the untold stylish and popular pubs and bars that thrive on every corner. This neighborhood is now one of the most exciting cultural districts in London.
In terms of property investment I cannot help but feel the boat has been missed on this one. If the clock could be turned back five years there’s no doubt the London Bridge area would have been near the top of any shrewd property investors list. However zone 1 currently seems to be over priced and offers less growth potential at the moment than many other areas of the city. Recent figures confirm the prime London real estate market (including much of zone 1) has seen a decrease in house price growth in 2015.
Many investors have turned their attention to zone 3. In fact the phrase ‘zone 3 is the new zone 2’ is buzzing around London real estate agent’s offices right now. Certain areas within zone 3 offer significantly less expensive properties with much larger growth potential based on huge regeneration projects and upgrades in transport links. Currently Europe’s largest construction project is the remarkable 118 kilometre new rail network ‘Crossrail’, which is expected to be fully completed in 2019. This will essentially connect the suburbs west of London through the centre of the city to the suburbs to the east of London at a cost of £15.9 billion. The new Crossrail station at Custom House – one stop from Canary Wharf, will also service the capital’s ‘next business district’; a major development backed by the mayor of London.
The Royal Docks is part of the Asian Business Port regeneration programme in the east of the city backed by a Chinese developer committed to spend £1.2 billion on a complex of offices, shops and apartments. The first phase is aimed for completion in 2017 and the entire project is due for completion in four phases over the next ten years with a predicted 103% increase in the population over that time period. A recent Knight Frank report identified this area as one of their London ‘hotspots’ forecasting a current £600-£700 per square feet increase to £900 – £1,000 by 2018.
Following Crossrail to the next new station moves south of the Thames and focuses on Woolwich which currently boast several high profile developments supported by around a dozen trains per hour linking this area to Canary Wharf and central London. Again predictions are good, Woolwich has been identified as another ‘hotspot’ with predictions of an almost 50% price per square foot increase over the next three years.
Still within zone 3 and yet presently only an eight minute rail link away from London Bridge is Greenwich which is one of the most beautiful, iconic and historically significant parts of London. A short distance from the thriving tourist masses visiting the Cutty Sark, the Royal Observatory, the Royal Naval College and the plethora of restaurants, cafes and boutiques there’s a residential property construction boom happening. Professional workers from the centre of London and Canary Wharf are fueling a residential high-demand short-supply situation resulting in a predicted three year price increase of 50%. Again Knight Frank identified this area as one of great growth with current prices around £600 per sq ft due to increase to £950 per sq ft by 2018.
As many potential investors seize advantage of the UK’s summer to take the family to visit London and see the sights and perhaps sneak a first-hand peak at some properties whilst there I would urge those who are serious about property investment to open their eyes away from zone 1 and the higher end postcodes and take a look down the river to zone 3 in the east. That’s where the real potential is and that’s where the real money is to be made!