• Brexit sparks overseas spending spree in London property
    Mon 03 Oct 2016
    The fall of the pound following the EU referendum has triggered a spending spree in London's property market from foreign investors.
    But these overseas buyers are no longer just targeting prime central locations.
    Changes in stamp duty mean that they are now interested in cheaper properties - pitting them head-to-head against jittery first-time buyers.

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  • Young professionals
    Fri 21 Mar 2014

    Young professionals hold the key to London's property market

    Young professionals make up a significant proportion of the capital’s workforce and where they’re living is shaping London’s housing market.

    According to recent figures from the Office of National Statistics (ONS), 60% of inner London’s working age population are graduates. This is more than twice the number in the North East (29%) of England and considerably higher than both Wales (33%) and Scotland (41%).

    Young professionals make up a significant proportion of the capital’s workforce and where they choose to live is helping shape London’s housing market. While proximity to work and amenities play an important part in determining where they live, house prices and rental costs are considerable drivers too. The pattern is a familiar one. As an area becomes established, so prices rise, forcing would-be incomers into cheaper, neighbouring postcode districts. And so the cycle begins again.

    Research not only illustrates the point, but shows just how marked an influence young professionals have had – and continue to have – on defining London’s housing market.

    Looking at the age profile across all London boroughs there are six that stand out. These are boroughs where over 50% of residents are aged between 20 and 44 – the London average is 43%. In ascending order they are Hackney, Lambeth, Islington, Hammersmith & Fulham, Wandsworth and Tower Hamlets.

    Young Professional London-1.jpg

    What is particularly interesting is that these are all boroughs that have seen significant price rises over the last decade. Young professionals have moved into what were once very affordable areas, and over time, driven up both demand and prices.

    The table below demonstrates the point further. Ten years ago house prices in Islington were 12% higher than the London average, in 2013, they are 40% higher. It’s a similar story in Hammersmith & Fulham where prices today are 65% above the London average, compared to 25% a decade ago and in once affordable Hackney, where prices were 6% lower than the London average, they’re now a staggering 22% higher.

    As the cycle continues, where will young professionals look to next as the areas we have highlighted become too expensive? Looking ahead lower value areas in boroughs which have already seen an influx of young professionals look set to benefit from increased demand. This could include neighbourhoods such as Dalston in the London Borough of Hackney and young professional renters and purchasers already relocating from more expensive areas in the borough, such as Hoxton and Shoreditch.

    We expect areas such as Camberwell (London Borough of Southwark) and Acton (on the borders of Hammersmith and Fulham and Ealing) will continue to see an increase in demand from young professionals. Both the boroughs of Ealing and Southwark have young populations, with 49.7% of Southwark residents and 43.1% of Ealing residents aged between 20 and 44, and good transport links into central London. Prices in the London Borough of Southwark are currently 12% higher than the London average with prices in Ealing 6% lower.

    Young Professional London-2.jpg


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  • London property prices:
    Fri 21 Mar 2014

    Rent or buy in London? That is the £82,412 questionLondon is currently the most renter-friendly location in Britain, according to property website Zoopla (Picture: FUTURE LIGHT)

    Paying steep London rents can feel like throwing money down the drain. But renting rather than buying might just be a better financial move – if you can afford it.

    It might come as a surprise to some, but according to property website Zoopla, London is currently the most renter-friendly location in Britain.

    Research showed that after seven years, a typical London renter is £82,412 better off than a buyer of an equivalent property who puts down a ten per cent deposit. And it would take 18 years for a London buyer with a ten per cent deposit to be financially better off compared to an equivalent renter.

    Away from the capital, Bournemouth is the second most renter-friendly town and Aberdeen the most cost-effective place to buy. But Zoopla’s Lawrence Hall says that while London may be the holy grail for property investors, despite it taking longer for them to be better off, buyers struggle to raise deposits.

    ‘It is much more buyer-friendly outside the capital,’ he says, ‘but with rising average prices and low savings rates, saving for a deposit has become increasingly difficult.’

    University graduate Jennifer Keegan was forced to move as she could no longer afford to live in north London (Picture: Supplied)University graduate Jennifer Keegan was forced to move as she could no longer afford to live in north London (Picture: Supplied)

    And despite renting being cheaper long term, most graduates find they can’t afford London rents.

    Rentals website Rentonomy looked at which parts of the city are affordable on a typical graduate’s salary and found 90 per cent of central London is now even out of the reach of those happy to rent just a room.

    The research looked at the cost of a room as a proportion of a salary with ‘affordable rent’ defined as less than 30 per cent of gross income. So, for an average graduate earning £22,400 per year, an unaffordable room costs over £129 a week or £560 per month.

    MORE: London property: Should I buy a house now or will a bubble send property prices down?

    Of London’s 48 ‘villages’ in Zones 1 and 2, only New Cross, Brockley, Walworth, Peckham, Deptford and Hackney are affordable. Graduates fare better in zone 3, where two-thirds of areas are affordable. Rentonomy’s David Butler admits even he didn’t realise the scale of the problem.

    ‘It’s shocking that young people are being squeezed out of inner London even if they’re prepared to massively compromise on space,’ he says.

    Aberdeen, ScotlandAberdeen is now the most cost-effective place to buy in the UK (Picture: inFocusDC)

    Graduate Jennifer Keegan recently had to find somewhere cheaper to rent. She was sharing a Highbury flat in Zone 2 and split the £590 weekly rent with four others so paid £120 for her room – around 28 per cent of her income. When the landlord upped the rent by five per cent, Jennifer, 28, couldn’t afford it and looked on Rentonomy for a cheaper area.

    The site helps you calculate rents across London and matches tenants with areas and properties. An interactive map helps you target the best areas for families, city workers and party animals and even points out the top spots for single men and women to live.

    Jennifer’s match was Walthamstow in Zone 3, although she wasn’t sure about the area.

    ‘Before I moved I was fairly prejudiced against Walthamstow,’ she admits. ‘The only thing I knew was that the band East 17 came from there!’

    She now pays £100 per week. ‘Now I live here I love it, it’s way cheaper and pretty much the same commuting time into work.

     

    ‘I can actually afford a bit more now but I don’t think I’m going to move back to Highbury or anywhere in central London anytime soon – it’s just not worth it.’


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