Lessons for the property investor
Investing in London regeneration areas is a key driver of value from property investment, with the potential to give early stage property investors above-average returns stretching years into the future. Investors in off-plan property in London have the potential to capture those benefits if they know where to look and how to look.
The story of Stratford
I remember travelling by train into central London years ago and, just before hitting Liverpool Street Station, coasting through a wasteland ripe for property investment but devoid of impetus. Then along came the Olympic Games, and massive regeneration that transformed an area into a living, vibrant proof of the effect of urban regeneration in London. I’m talking, of course, about Stratford and the Lower Lea Valley, where property investors who saw the potential are now reaping the benefits.
Stratford’s regeneration was prompted by the need to give the world its first London Olympics for more than 60 years. The results have been astounding:
- Tens of thousands of local jobs have been created. £17 billion was spent on transport improvements.
- The Olympic Village has been converted into 9,000 new homes after the event, to meet the needs of a rapidly-growing population.
- The sports facilities left behind have been turned over for community use.
- The Olympic Stadium is now home to a premiership football team and will host a variety of other events, all bringing more business into the area and providing long-lasting economic outcomes.
Before all this took place, though, the whole area was devoid of life: run-down schools mingled with disused industrial units. The transformation as a result of London regeneration has been inspirational but is not yet complete. Property investment here is likely to prompt the development of 24,000 more homes.
Property investors have already seen property values take off. After hovering around £220,000 to £250,000 between 2008 and 2013, the median price of a two-bedroom property in Stratford has exploded. Since the end of 2013, the value of two-bedroom properties here has increased to £512,500 – that’s a rise of more than 110% in less than three years.
Many property investors who bought off-plan property in London here had benefitted by even more – buying at discounts to the market value before the rapid price rises started to take hold.
If you look around London now, property investors had similar opportunities to Stratford ten years ago. Now, massive urban regeneration is being prompted by greater transport connectivity.
The London regeneration map of off-plan property
Two major projects – Crossrail and High Speed Two – are being accompanied by a huge financial commitment to London regeneration projects that could provide similar returns to those experienced by property investors in Stratford.
For example, those who purchase investment property in Wembley will benefit from short journey times into central London, and Brent Council is pushing for a Crossrail link to Old Oak Common. Here, too, there are property investment opportunities opening up, with the whole area about to become London’s largest single regeneration project, and a hub for Crossrail, classic rail, and High-Speed Two.
In fact, Old Oak Common reminds me in many ways of Stratford before its boom: great swathes of neglected brownfield ripe for development. Current plans estimate thousands of new jobs and rapid growth in local population stretching out 20 years from now. A stone’s throw away, off-plan property in London at Wembley benefits from its iconic location and almost £4 billion of regeneration projects currently in progress.
Investment in Elephant & Castle is another location where £3 billion of regeneration projects are having a transformational effect. The area is morphing at a rapid pace from its reputation as a run-down and neglected hinterland to one of the chic places to be. It’s right on the doorstep of London’s most vibrant nightlife, and just a 12-minute walk from The Shard.
In these locations and others, I see great opportunities and the potential for property investors in off-plan property in London. The returns that have been made over the last few years by property investors in Stratford could be possible elsewhere.
As always, the team are here to talk you through anything you need; we’re here to support you to secure the best off-plan property available in London regeneration areas. Call our team on +44 (0)207 923 6100 and discover why our clients invest in only the best property opportunities.
Cheers,
David Lines
