If you’re looking to invest in the capital’s ever thriving rental market, these are the London locations tipped for house price growth between now and 2021…
When looking at where to invest in property, it’s essential that you don’t just focus on possible rental yields – house price growth is also a key factor in how lucrative your investment will be.
That’s why experts at Portico – a top London estate agent – have picked out ten London locations that they think will boast strong house price growth between now and 2021 (ranked in no particular order).
The agent has also revealed the highest potential rental yield in each London location, with Forest Gate offering the greatest, at 5.5%, and Southwark the lowest, at 3.6%.
Portico’s property experts also highlight the signs that show when an area is on the up – infrastructure investment, fashionable eateries opening up and young professionals moving in.
Remember, if you do decide to invest in any of these key London locations, we offer the widest Landlord Insurance available as standard – rated 5 Star by Defaqto and with 40 essential covers – to protect your property: https://www.justlandlords.co.uk/landlord-insurance
Average two-bedroom house price: £340,000
Average two-bedroom rent price: £1,250 per month
Highest potential yield: 5.1%
The Regional Director of Portico, Vatche Cherchian, explains why you should invest here: “When Crossrail launches in Hayes next year, the area will suddenly be much more accessible and desirable to both investors and first time buyers. Currently, this west London town is only served by Great Western railway at Hayes & Harlington station, but, from 2018, the Elizabeth Line will take residents into the West End in just 20 minutes and into the City in under half an hour.
“Regeneration is smartening up the town centre, which will help deliver economic growth, jobs and a thriving economy. New pavements are being created on both sides of the road, additional street lighting improvements are underway, and a Made in Hayes new landmark has just been unveiled. The council hopes this will give Hayes the wow factor; I think it will make it an attractive hub for young professionals and young families, who can get more value for their money here than in other parts of west and east London.”
Average two-bedroom house price: £380,000
Average two-bedroom rent price: £1,325 per month
Highest potential yield: 4.4%
Mark Lawrinson, the Regional Director of Portico, comments on this London location: “We’re seeing an increasing number of people venture further out of London to get more space for their money, and Enfield is the last major area before you go outside the M25. It has great transport links for road users and several stations taking commuters directly into Moorgate or King’s Cross, as well as great schools and a good mix of both houses and flats, making it an attractive area for professional couples and people looking to start a family.”
- Hanwell/West Ealing
Average two-bedroom house price in Hanwell: £580,000
Average two-bedroom rent price in Hanwell: £1,400 per month
Highest potential yield in Hanwell: 4.0%
Here’s why Cherchian is behind this area: “Neighbouring Hanwell and West Ealing will be serviced by Crossrail next year, and have already seen some healthy property price growth as a result of this. I expect property prices in the area will continue on their upward climb over the next few years.
“Hanwell has really come into its own in recent years, thanks to a thriving array of small businesses and a great community spirit. The area boasts a wide variety of different types and styles of property, from large Victorian and Edwardian family houses to new build developments and smaller maisonettes, and excellent local schools, including the high performing Insights Independent School.”
So what about West Ealing?
Average two-bedroom house price in West Ealing: £565,000
Average two-bedroom rent price in West Ealing: £1,600 per month
Highest potential yield in West Ealing: 3.6%
Cherchian says: “Ealing is already one of the best connected locations in London, but the Crossrail rail link at West Ealing will see journey times to Paddington cut to just ten minutes and to Canary Wharf to just 27 minutes. I expect more businesses to move to the area, attracted by the easy transport links to the rest of the capital and lower overheads.
“West Ealing still serves as excellent value for money compared to neighbouring Ealing Broadway and Chiswick to the south, where prices are much higher and yields are not as attractive for investors.”
Average two-bedroom house price: £690,000
Average two-bedroom rent price: £1,993 per month
Highest potential yield: 3.6%
Southwark is also on the list. Cherchian explains why: “Southwark has become an extremely attractive place to settle, thanks to vast regeneration and development in the area. It has always been a hub for art and culture, offering the Tate Modern and Borough Market, but there has been a surge in new restaurants, nightlife and amenities as of late, which has only added to the area’s appeal.
“A huge number of businesses are now moving into this new extension of the City, where the rent is slightly lower than it is in prime central London. In addition to this, SE1 is easily accessible with Thameslink and central London is on the doorstep, so commuters can walk to work in the City.”
Average two-bedroom house price: £550,000
Average two-bedroom rent price: £1,600 per month
Highest potential yield: 4.8%
Cherchian gives his reasons for investing in Camberwell: “Since the Overground arrived in Camberwell back in 2012, this Zone 2 area has gone from strength to strength. It is a magnet for arty, young creative types and young families, drawn to the cool brunch spots, pizza places and craft pubs with busy beer gardens.
“Camberwell’s good supply of family period housing and affordable property prices are drawing in those who are being out-priced of more expensive neighbouring areas, such as Clapham, Balham, Brixton and Dulwich.”
He adds: “It’s a similar story in Peckham, where arty clubs, gigs, galleries and rooftop bars have lured homebuyers and renters from now expensive Hackney, Hoxton and Dalston. There are proposals to gentrify and modernise the town centre with a new-look square, shopping and housing area in front of Peckham Library.”
Average two-bedroom house price: £425,000
Average two-bedroom rent price: £1,495 per month
Highest potential yield: 4.8%
Why does Lewisham make the list? Cherchian says: “Lewisham Gateway is a major regeneration scheme, which has put Lewisham firmly back on the radar for homebuyers and investors. So far, the scheme has enhanced Lewisham town centre, improved access to its public transport hub and built hundreds of new homes, and there is more regeneration to come.
“The property ladder is becoming shorter, as buyers are keen to avoid expensive transaction costs by skipping the lower steps. Instead of starting with a studio or apartments, first time buyers are now looking for affordable two or three-bedroom houses in outer areas like Lewisham.”
Average two-bedroom house price: £535,000
Average two-bedroom rent price: £1,475 per month
Highest potential yield: 4.1%
Lawrinson gives his killer reasons for investing here: “Greater London definitely performed better than prime central London last year, and it’s likely this trend will continue throughout 2017. This is because prices in the outer boroughs, in areas like Haringey, are starting from a lower base, so there is greater potential for price rises.
“The Haringey Ladder is an area that has been overlooked for years and has seen little gentrification, but is now starting to emerge as a key property hotspot. It is being squeezed by surrounding developments and areas, such as Finsbury Park and Crouch End, where prices have already seen significant increases. It has a vibrant high street and is on the doorstep of large outdoor spaces, such as Finsbury Park and Alexandra Palace.”
He continues: “Furthermore, the Haringey Ladder pushes onto Wood Green, which is one of the proposed routes for Crossrail 2. If Crossrail 2 is given the green light, it’s very likely we’ll see significant change to this whole area, which will push up house prices significantly.”
Average two-bedroom house price: £400,000
Average two-bedroom rent price: £1,450 per month
Highest potential yield: 4.5%
Why is Tottenham on the list of the top London locations to invest in? Lawrinson finds out: “With the new stadium construction beginning this year, and plans for further flats to be developed on the old site and surrounding areas, Tottenham is now about to undergo the regeneration it has been desperately waiting for.
“The station at Tottenham Hale has already undergone full refurbishment and offers great access into London, with the Stanstead Express taking you into Stanstead Airport in just 30 minutes. Further London infrastructure improvements will come as a result of the new stadium, and I believe we’ll see some great and significant changes to the area over the coming years.”
Average two-bedroom house price: £450,000
Average two-bedroom rent price: £1,450 per month
Highest potential yield: 3.8%
Lawrinson explains why Woolwich is on the list: “The historic site of the Woolwich Arsenal barracks are already undergoing significant development, but the area has been unable to be truly elevated due to the lack of good transport links. When Crossrail opens in Woolwich in December 2018, it will give the area the boost it has been waiting for, offering easy access into Canary Wharf and the City.
“In the next 18 months, we’re likely to see a huge number of amenities move into the area, and, with Greenwich on the doorstep, the area is going to become extremely desirable to first time buyers and families.”
- Forest Gate
Average two-bedroom house price: £300,000
Average two-bedroom rent price: £1,350 per month
Highest potential yield: 5.5%
Finally, it’s Forest Gate. Lawrinson gives his reasons: “Property prices in Forest Gate have ballooned in recent years, thanks to Crossrail’s imminent arrival, but the area still has potential for price growth.
“The area is starting to gentrify and offers stunning, affordable Victorian and Edwardian properties, and a location on the doorstep of the popular Wanstead Flats. Better still, it’s on the doorstep of regenerated Stratford, which has all the relevant infrastructure, amenities and nightlife, as well as an easy commute in and out of the City.”
Which of these top London locations has you tempted to invest?