Best Places to Invest in London – The Night Tube

The best places to invest in London – ride the night tube to success

It may have taken a long time to get off the ground, as well as plenty of commuter upheaval caused by industrial disputes, but, now it’s finally up and running, London’s Night Tube is proving to be quite a success. In this article, you’ll find out the difference it’s making to London’s economy and London property investment along its route ­– and why this is a clue as to where you’ll find the best places to invest in London.

Whatever your political colour, London’s Night Tube is a success

Boris Johnson said that the Night Tube would make London a “bustling, 24-hour city” creating “vital jobs and giving a huge boost to our economy”. He said it would “without a doubt makes London an even better place to live, work, visit and invest”.

However, while Boris Johnson was the Mayor of London, the Night Tube never got running. Three start dates were swept away by union protests, strikes, and disharmony. Eventually, after the Conservative Johnson was replaced by Labour’s Sadiq Khan as London’s Mayor, and the Night Tube ran its first service in August 2016.

Khan has said that the service has “changed the face of weekend travel forever”, and that it will provide more jobs, support the growth of the capital’s night-time economy, and give commuters more flexibility. He said it would make London a place where people desire to live, work, and play.

It seems that there are some things that politicians from opposite ends of the spectrum can agree on after all.

A huge economic boost for London

Transport for London (TfL) said the Night Tube would support 2,000 permanent jobs and boost London’s economy by more than £350 million. The Centre for Economics and Business Research (CEBR) says that London’s night-time economy would power up to an enormous £30 billion a year by 2030.

The Night Tube (along with Crossrail and Crossrail 2) will be transformative to London’s economy, and that will create some incredible property investment opportunities.

Proving Brexit is national and the Night Tube is local

Investment property fundementals provide property investors with the property investment education they need to make informed investment decisions. While all the press talk and media disquiet has been about Brexit, property investors have been cashing in on the Night Tube effect.

The Night Tube makes travelling for work and play a whole lot easier, faster, and more convenient. It brings outer suburbs within reach of central London. Residential property investment prices have been rising fast along the Victoria and Central lines (the first Night Tube services).

A look at the eMoov Night Tube property map shows that property prices near stations like Euston increased by around 8%. That’s in a year when London property prices have been dampened by the Brexit effect.

For buy-to-let investments there’s even better news – rental prices in the outer zones 3 to 6 have increased by as much as 20% in the last two years. Compare that to the average 7% rent rise across London over the same period, and you begin to see just how big an effect the Night Tube has for property investment.

Widening the market for young professional renters

Young professionals are one of the fastest-growing sectors of the private rented sector. They want to live in apartments with all the mod cons. They want to be near work, and on the doorstep of night-time action. They’re less likely to have a car and more likely to travel by public transport. This sort of convenience used to mean living in central London, in zones 1 and 2 on the tube line. Not any longer. The Night Tube means that young professionals can work hard, party hard, and be sure of getting home at night.

Where are property prices going to rise the most?

When Crossrail was announced, investment property prices near stations along its route spiralled upward as demand from investors, home buyers and tenants rose. The effect that the Victoria and Central line services have had on residential property prices is a further clue to where to look next. If you’re looking for London property hotspots for your property investment, these experiences will be telling you to:

  • Search along the next lines to offer Night Tube service
  • Look close to stations along those routes (within a 10 to 15-minute walk)
  • Look further out, in the outer suburbs
  • Invest in modern apartments that will appeal to young professionals

Investment research from Dataloft and Sellmyhome confirm what our property research is telling us. It is that residential property prices within a half-mile of Night Tube stations are likely to increase by 5% to 10% over and above the rate of growth in the surrounding areas. That’s exactly the magnitude of outperformance witnessed near Crossrail stations.

Stations in zones 3 to 6 are now fair game for you as locations where the best property investment opportunities could be found.

What else should you consider before investing?

Of course, the existence of the Night Tube is not enough on its own to make a decision about an investment property. You’ll need to make sure that there will be a demand for buy-to-let property, and that the demand for rental property is consistent.

You should be checking that the area is popular with young families and young professionals. Modern housing will appeal the most. Even though the Night Tube brings London closer, this target demographic will also want restaurants and bars within walking distance and retail and relaxation options nearby.

Just how have property prices near Night Tube stations performed?

A closer look at a few of the stations along the course of the Central line gives us another clue as to how investment property prices near other stations and on other Night Tube lines may progress.

In Leyton (in zone 3) the average house price now stands at £420,695. That’s a rise of more than 60% in the last two years. It’s got plenty of green space, and the recreational areas of Lea Valley, Hackney Marshes, and Queen Elizabeth Olympic Park are all nearby. There are good schools, a plethora of friendly bars and restaurants within walking distance, and the area is undergoing regeneration

West Ham has seen similar property price growth, and with the football club’s move to the Olympic Stadium, price action could continue as regeneration takes the upper hand.

A little further out in zone 4, Fairlop has provided more property investment opportunities over the last few years. Residents here not only benefit from the Night Tube, but also from proximity to Fairlop Waters Country Park, where you’ll find plenty of fishing and water sports. Here, the average property price has increased by more than 50% in the last couple of years.

Where’s the best property investment opportunity?

Our property research covers 108 data points across 324 UK areas. Using this information we’re able to build up a comprehensive picture of the property investment opportunity of any area.

Having drilled down to an area for investment, we then begin the search for the best property investment opportunities within that area. We consider the developments, the developer, and the individual properties. Finally, we work with developers to bring exclusive off-plan property investment opportunities to our clients.

Right now, one of our favoured locations is Stanmore, Royal Arsenal as well as Charlton.

Contact one of our team on +44 (0)207 923 6100 to find out more about this and other property investment opportunities that will benefit from London’s Night Tube.

Live with passion

Brett Alegre-Wood

About the Author

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Gladfish. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids.

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