If you’re a landlord or property investor, you’ll be taking a serious look at the prospects for property in London in 2021 following what can only be described as an unusual year. To help, we asked property experts at Portico how they see the next year shaping up.
The economic problems caused by the pandemic and delays in Brexit have created an atmosphere of uncertainty. But, despite that, Portico believes there have been encouraging signs of price and yield increases around London.
Portico points to outer London boroughs in particular as buyers and renters working from home look for larger properties. That’s reflected in seven hotspots Portico believes are best to buy in 2021.
Top picks for where to buy in London in 2021
Barking and Dagenham
Top of the list is Barking and Dagenham in the east where average yields in 2020 increased to 5.4 percent. Prices were up too (3 percent) with average house prices at £315,000 and large 3 or 4 bedroom properties selling for around £800,000.
It’s already one of the cheapest places to buy in London, but new developments are attracting even more buyers and investors with ambitious plans for 50,000 new homes in the next 20 years.
Barking Riverside is one of the largest projects in London with a development of around 10,800 new homes, a new ecology centre and wetlands site and a link to the London overground network. Barking Central, close to underground, overground and National Rail services, will see 272 new one and two-bedroom apartments and three-bed homes.
In the south west, Sutton is proving attractive. Yields are up with an average of 4.4 percent, house prices have jumped 3 percent, with an average of £449,000 and the area has seen investment of over £400 million.
Location is a big factor. Sutton has a village feel — it’s close to the Surrey countryside, but just 30 minutes from central London by rail.
Merton is a leafy South London suburb with attractive older houses, green spaces and good transport links to central London.
It was the leading London location for price rises – up 3.2 percent on a July to July basis – with an average price of £820,000, more than 33 percent above the London average. In contrast, average rental of £448 per week is more than 20 percent below the London average.
Redbridge in the east is an area with fast growing potential. Property prices here are not only affordable, they are likely to grow at a strong rate over the next few years thanks to the imminent completion of Crossrail. Rightmove predicts that prices in the area could rise by as much as 17 percent by 2024. And , Redbridge was among the few London boroughs to achieve an increase in rents during 2020 according to the Homelet Rental Index.
The average property price in Redbridge at £453,526 in December, according to Zoopla – an increase of 1.51 percent since September. Flats sell for an average of £354, 472 with terraced houses averaging £199, 293.
Newham in the East, is the fastest growing London borough by population, up 25 percent since 2015, and there is development to match with wide-scale regeneration around the Olympic Park, Westfield and Stratford Station.
At West Ham a £1 billion 26-acre project at Twelve Trees Park will provide almost 4,000 new homes, shops, leisure facilities and creative studios by 2033, including one-bedroom flats for around £527,500 and two-bedroom homes at around £730,000.
The former West Ham football stadium has been redeveloped to provide almost 850 new homes with one-bedroom flats around £365,000 and two-bedroom flats from £455,000. A further development on the site of a former gasworks has permission for 2800 new homes.
Harrow in north-west London saw house prices up 0.82 percent, with an average of £473,796 and average weekly rental of £397. The area has many green spaces as well as good transport links by underground, overground and National Rail services.
Haringey in north London will see strong development. At Tottenham Hale, close to the Lea Valley Regional Park, 2000 new homes will be built, together with new offices, shops, cafes and a refurbished station.
Clarendon is a new ‘village’ with plans for 1700 new homes, plus offices, restaurants and bars. Prices will range from £350,000 to £716,000. Meridian Water has planned investment of £6 billion going into 10,000 new homes over the next 20 years.
Portico can help
These are encouraging developments and Portico believes that 2021 and beyond could see substantial movement in the London property market with economic conditions hopefully improving, pent-up demand and buyers and renters looking for more space to live and work.
In fact, Barclays UK Property Predictor puts London as the top region for growth over the next 5 years with an expected average annual increase of 2.27 percent.
If you would like to discuss investment opportunities or find out more about any of these investment hotspots, please contact Portico on 020 7099 4000.