The Daily Telegraph - Saturday - Money
Can’t afford a property in London? You’re probably looking in the wrong places
The capital offers pockets of affordability for first-time buyers – especially for those who want green spaces and quick access into the centre of town
Finding a property bargain is a real win. Buying a lower priced home with potential in an attractive area is a serious achievement, particularly these days. Even if you are an experienced property owner it is incredibly difficult to find these homes.
However, for first-time buyers it is game- changing. I would be hard pressed to think of a better way to get your foot on the ownership ladder, and maybe even jump up a few rungs when the time comes to sell, than a property in an up-and- coming area with the opportunity to add value to it.
But finding these properties is no easy feat. In fact, I would go as far to say it is getting much more difficult. Increased mortgage costs without a reciprocal fall in house prices is making it harder to own your home.
First-time buyers have always been the cohort with the best noses for hunting down a deal, they are laser-focused on price and are not as constrained by schools and established communities built up by living somewhere for years as second or third-time movers may be.
My first property was in Battersea, an unpopular area at the time. I remember when taxis wouldn’t drive down Northcote Road. It was a large flat on the South Circular that I was able to convert into two properties.
Over the five years that I lived there the area changed enormously and while I didn’t love living on a busy road, that was the compromise for the eventual value I gained. Data from estate agent Hamptons show that areas in London many of us may not have heard of are now experiencing a huge surge in interest from prospective buyers. They are, I suspect, looking for a good deal.
This seeking out of value and the resulting change in area popularity and make up has happened throughout history, and will continue to happen.
In west London, it may surprise people that Earl’s Court used to be really cheap, surrounded by prime real estate in Chelsea. And Chelsea itself used to be where the artists lived, while grander people lived in Notting Hill and Holland Park. Even Paddington used to be really cheap, despite being down the road from Notting Hill.
So, where are the new places to be watching? Hamptons’ own data show that Brockley has seen a 161pc rise in applications over the past year. The south- east London neighbourhood gained interest from buyers and began to be well thought of around five years ago. It has great green space, quick access into the centre of town, and the retail offering is now starting to look more promising. That is always a good sign that there is a bit more disposable income coming into an area if there are cafés opening, and people are doing up pubs.
As a result of Brockley’s popularity I would expect something similar to happen in nearby Lewisham. Although less suburban in feel, it benefits from the same connections as Brockley and currently offers a slightly cheaper price point for properties. If I were looking to buy in the area I would try to keep away from the main roads, although admittedly easier said than done.
There are similar dynamics at play in south-west London, in Surbiton and Chessington, on the Surrey border. If I am being honest, I doubt that 10 or even five years ago people working in London put Chessington at the top of their location list, but they probably did put Surbiton up there. With more people are looking for the benefits of being further out, interest in Chessington has increased. Hamptons’ own data shows a 150pc rise in applications in the past 12 months alone.
One of my tricks for finding a location is to ask your estate agent where they live. They will know the areas that offer the best value and are likely to deliver a return if you decide to sell a few years down the line. When I had a home finding business in the 2000s there was a time where every agent across south London was buying in Colliers Wood. They are in the market daily, as are their friends and they are best placed to know the market, use their knowledge and don’t just chat to your agent – speak to as many as you can.
It has always intrigued me how much better value you find when you head east out of London. You have good transport links and once you are out into Essex there is lovely countryside. For quite a long time people have headed east to find better value, and there is little chance of that changing. My gut instinct is that the east will only become more attractive as west London becomes increasingly unaffordable.
As trendy parts of east London such as Dalston and Hackney have increased in popularity over the past decade the prices have risen leading buyers to look further afield.
Wanstead, on the Central Line, offers an easy commute into the city, green space thanks to Wanstead Flats and nearby Epping Forest, and quick routes out of the capital. As so often happens, its popularity has had a knock-on effect.
In neighbouring Barkingside, applications for homes have risen by 156pc in the past year and there are properties on offer with prices more attractive than better-known areas nearby.
However, you don’t have to be too far from your target location to find a more achievable price. Locksbottom, on the border with Kent, has had a 69pc rise in applications, but you can save large amounts of money on a house in some parts of the area, compared to those nearer the railway station. Of course, you may need to be closer to transport links so my advice is to work out what you are prepared to compromise on.
There are also areas that offer a stark price decrease compared to their better heeled neighbours, but could provide a nice option if you want to benefit from what’s on offer close by without committing to the price tag.
One such area in north-west London is Kilburn, down the road from Primrose Hill. The latter is long established as a hugely desirable place to live. It has green space, views, wonderful architecture, that sought-after in-town village feel – it has it all going on. I have always seen Kilburn as slightly gritty.
However, you are more likely to find a good deal on a property, and prices should rise due to the disparity with neighbours, so you have a decent chance at getting return on your investment, particularly if you can see opportunities for improvements.
Demand is looking likely to continue rising, meaning that less soughtout areas will become more desirable and houses in the area will benefit with value increases at least in line with national averages.
The holy grail is when the value of your property outperforms the market trend – that is what you are aiming for. If all prices rise by 10pc then it may feel like you have made money but when you go to buy, the properties you are looking at will also have seen a lift. However, if the market moves by 10pc and your house increases by 15pc then you have that extra equity to play with.
A couple I helped recently were happy to live in a flat without many opportunities to add value, over a twobed house with a garden. For them the location was paramount and their budget couldn’t reach a house in that area. There is no first-time buyer in the land that ends up with exactly what they want, where they want it.
‘Areas in London many of us may not have heard of are seeing a huge surge in interest from buyers’