James Allen, head of Walker Crips Alternative Investments, comments on the infrastructure development necessary to unlock the potential of the London property market:
“Over recent years areas of London such as Hackney, Lewisham and Brixton have undergone significant regeneration – a change that has been reflected in local property prices. Much of these boroughs are now no longer accessible to the average first time buyer.
“With first time buyers reaching the highest level in ten years people are looking for areas that offer what Hackney and Lewisham did just five years ago: a good location at affordable prices. One such area is Nine Elms, which has granted planning permission for large tracts and with significant development already underway. This has been inspired by the move of the recently opened US embassy and the new underground station due in 2020 as part of the northern line expansion.
“Manufacturing moving out of London in recent decades has resulted in large amounts of vacant industrial space, and in Nine Elms these spaces are now starting to be redeveloped into new property stock. The properties being built are predominantly studio, one and two bed flats that aren’t big but are affordable, relative to the London market, making them perfect for first time buyers.
“With this level of development, backed by significant investment in local infrastructure, Nine Elms is likely to see substantial price growth similar to that of Hackney and Lewisham. Encouragingly, this level of change is based on completely new housing stock and not the redevelopment of existing properties. It is also not the type of gentrification that often results in the displacement of people already living in the area.
“What remains to be seen is whether the level of infrastructure investment and associated buzz currently seen in Nine Elms will become the norm. In a London market where every last pocket of value is rapidly disappearing it seems only this level of public and privately funded regeneration can create new desirable areas, which meet the demand from first time buyers.”