Property hotspots: Up and coming areas for 2016
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Some call it property bingo but there’s more skill than luck when it comes to predicting where UK house prices are most likely to rise in 2016. And Britain’s estate agents are adept at identifying hotspots. For some it’s old-fashioned instincts and local knowledge. They spy the first green shoots of an up-and-coming area (the arrival of an independent coffee shop, perhaps), anticipate improved commuter routes or discover a newly planned school. For other agents, it’s a shrewd market assessment of housing stock, supply and demand and continuing low interest rates, set against the RICS prediction of a six per cent rise in house prices this year.
Either way, there’s something uniquely thrilling about spotting a previously unknown hotspot – and being proved right. “It’s a bit like surfing,” says Daniel Killick, Associate Director of Sales and Lettings at Chestertons in Kew. “You’ve got to work out where the wave of rapidly rising values is breaking and get your timing just right. Get it spot-on and you can buy somewhere just on the cusp of being the next big thing – within a few months of moving in you should see strong price rises.”
Here are 10 expert predictions for 2016:
It’s more accessible than many people realise and this south west county is tipped by many to see an increase in activity and values. And there are some villages in particular that are worth watching. “Hotspots include Milverton – it has always attracted lots of interest, both from local buyers and those coming from further afield,” says Oliver Custance Baker, Associate at Strutt & Parker in Exeter. “Villages within 10 miles of Taunton will certainly pick up, particularly places such as Bishops Lydeard, Combe Florey and West Bagborough. For those people looking to be in an accessible location, I would suggest places such as Fivehead and Curry Mallet. The market around Crewkerne will also continue to develop. Overall, the market has been held back in Somerset for the last five years but now the level of transactions and number of new buyers registering are both noticeably increasing. From our research, we know that there is a huge aspiration to live there – our national survey showed that 15.6 per cent of respondents who said they had plans to move within the next five years wanted to live in the south west.”
The research team at Savills are putting their money on the outer reaches of the capital. They say: “London’s mainstream markets are expected to underperform its hinterland, with average growth of 15.3 per cent forecast over the next five years, though this will range from 20 per cent to just 10 per cent depending on specific location and post downturn levels of house price growth.
“Lower value outer London boroughs have greater remaining capacity for house price growth than higher value parts of the capital, having grown in line with the south east and east of England rather than London itself over recent years. Walthamstow and Lewisham are expected to show the strongest growth, outperforming the mainstream submarkets of boroughs such as Hammersmith and Fulham, and Richmond.”
In the shadow of the Shard, Borough and Bermondsey are enjoying a boom, continuing SE1’s growth in popularity over the last few years. Further price growth is anticipated with the completion of London Bridge rail improvements and the Thameslink upgrade. Mr Killick said: “As the corporates have moved into the area, it has become increasingly trendy – Maltby Street Market and the boutique-strewn Bermondsey Street complement Borough Market and the phenomenal redevelopment going on around the Shard.
“As well as a host of modern residential developments, the area has seen a change in perception to become an attractive destination for young professionals that allows them to walk to work in the City, while offering super-fast connections to the West End, wider South London and Kent. The area offers riverside living at a (marginally) more affordable price than other locations, while wider Bermondsey is now also benefiting from the droves of corporates, start-ups and young professionals flocking to the area.”
Landlocked and laying claim to being the smallest historic county in England, Rutland has been described by some as a little oasis. Edward Brassey, Head of Strutt & Parker in Market Harborough, said: “Rutland Water, Anglian Water’s four mile square reservoir created by the damming of the Gwash Valley in 1975, is popular with those who enjoy water sports such as sailing and canoeing. You have everything here from artisan bakeries right the way through to open air theatres.
“Prices in Rutland always hold their own and if on Rutland Water you can naturally command a premium. There is not only a good sales market but a strong rental market too. Edith Weston on the south-eastern shore is home to just over 1,000 people and, importantly, to Rutland Sailing Club. It possesses an English village with a shop, a thatched pub, a church that dates back to the 12th Century and a village hall.”
St Albans has been a well-known hotspot for a while but the local market shows no sign of cooling in 2016. Rozanne Edwards, Head of Strutt & Parker in St Albans, said: “Fifty per cent of our buyers are from London, driven mainly by schools and commutability. This figure is likely to increase as more Londoners look further afield to buy. Demand in St Albans is far outstripping supply at the moment, so with this trend likely to persist, it is fair to say investing in St Albans is a guaranteed safe bet. Sometimes the safest bets are best!
“London is a big market driver here because you can commute into St Pancras in circa 19 minutes via Thames Link. The close proximity of major road networks also appeals.”
Greenwich and Blackheath have shown strong signs of growth over the past few years and record prices are now being seen for the area. Mr Killick said: “Typical buyers interested in Greenwich and Blackheath are from within the UK and the majority are first-time buyers moving in a southerly or easterly direction from Canary Wharf or the City.
“There is a growing demand for property towards the Greenwich Peninsula where a further 10,000 new homes are being built, offering a similar sort of housing mix and lifestyle as the booming residential developments of Canary Wharf. Good transport links remain a key attraction of the area, with trains, Tubes, the DLR, buses and even water routes offering easy access to the City and Canary Wharf. There’s plenty of green space too and a range of good cafés, restaurants, bars and boutiques for relaxing after work or at weekends.”
Nine miles south of Oxford and perhaps best known as a railway junction, Didcot has a surprising amount to offer, not least because of its rail links. James Mackenzie, Head of Strutt & Parker’s Country Department, said: “Anything near Didcot station is starting to fly off the rails. It ticks a lot of boxes – pretty, commutable, packed with excellent schools. It will benefit hugely from Crossrail, as will Oxford, Newbury and Pangbourne.”
Ever since the BBC opened up shop in Media City in 2011, Salford has seen strong house price rises. According to the Halifax, it was the top hotspot in the UK in 2015 – the number of property sales leapt by 23 per cent compared to 2014 – and there is little to suggest that the market will cool in 2016.
The rise of the north London hipster shows no signs of abating and house prices in Hackney are rising accordingly, particularly if the area borders Islington, a well-established hotspot. “It’s fair to say we’ve seen significant changes over the past few years with the East London Line extension of the overground network making Hackney much more accessible. Therefore it’s a very attractive place to live for those who work in the booming financial or tech sectors,” said Mr Killick.
“That said, Hackney is continuing to change and change fast. The delights of London Fields, Victoria Park and De Beauvoir Town are making trendy locales such as Dalston, Haggerston, Shoreditch and Hoxton great places of interest for savvy first-time buyers prepared to hunt down a bargain. Hackney is also supremely well placed to benefit from the drive of buyers seeking ‘added value’ by finding the perfect point to enter the market.”
It’s not everyone’s cup of tea, but Swindon, made famous by the play ‘A Curious Incident of the Dog in the Night-time’ is on the up, not least because of plans to electrify the train line to London. Mr Mackenzie said: “I see a handful of people get off the train home from London at Swindon but I think that number will grow. The Wiltshire area is really beautiful, close to Marlborough North. Pinewood Preparatory and Marlborough schools are well known for being exceptional. These areas are very accessible too, both by car and train.”
So, keep your eyes peeled if you want to take advantage of this year’s market trends. Do your research, talk to local estate and letting agents and bingo! You could find yourself living in a property hotspot.
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