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London's suburbs to catch central bubble

9th January 2007 | back to article listings BACK    print this article PRINT

Experts predict that London property investors will experience the 'ripple effect' in the next 12 months, as suburban areas replace more central neighbourhoods as the capital's investment hotspots, predict leading property experts.

Elephant and Castle, Woolwich, Stratford and Deptford will be the capital's top property hotspots of 2007, according to property adviser DTZ Residential, while Harrow and Croydon will also experience above average house price inflation, the firm predicts.

In 2006, London's house prices grew by 12.2 per cent, according to Halifax, considerably above the UK as a whole, which were 9.9 per cent higher than 12 months previous.

"The prime central London market has experienced higher price rises than expected in 2006, with high demand expected to continue into next year. Coupled with low supply, this should ensure the market remains fluid throughout 2007," commented Peter Braithwaite, chairman of DTZ Residential.

He added: "The prime central London market is currently experiencing different levels of growth. The lower end of the market is being kept buoyant with first-time buyers. The shortage of stock is pushing up prices, which are now between £200,000 and £300,000."

However, while the capital plushest locations of Kensington and Chelsea, Primrose Hill and Knightsbridge are out of financial reach of many buy-to-let investors, this may be the year when there are also considerable gains to be made in suburban areas.

These gains are likely to be in south and east London in particular, areas which the property expert deems, "historically cheaper and more affordable".

Prices are likely to rise rapidly in the two regions in anticipation of building work on the London Underground which will extend the East London line north to Dalston Junction and south to New Cross, Crystal Palace and West Croydon. In addition, the Docklands Light Railway will be extended to Woolwich.

Homes in east London in particular are likely to gain value over the next few years as development for the 2012 Olympic Games, based in Stratford, accelerates.

Last month, property investment specialists Assetz predicted "meteoric growth" for the capital's property.

In a statement, the firm said: "In the prime central locations of Belgravia, Knightsbridge and Mayfair, price rises of a hundred per cent in real terms are possible over the next decade or less, from January 2006.

"For many city workers, international business people and jet setters, London is a location where they must own property and the weight of money versus shortage of supply in these quality locations will drive a dramatic price shift."

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3209.html. Alternatively, please see our full press release archive.

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