JAMES WATTS

James Watts
It pays to know your London postcodes
03 October 2014

Mention Clapton and Bermondsey and you might be forgiven for not knowing where they are in London.  But ignore them at your peril.  The value increases in London’s property market are now making these areas ripe for investment opportunities as well as areas where the young professionals are choosing to live.

London is buzzing with new developments and key to taking a punt on which area is going to take off next is market knowledge, a clear criteria of what you are looking for and the intention of buying the best that you can with your money. 

Take three clients with similar budgets.  One, whose parents were buying a property for their child, opted for the more traditional destination of Fulham.   Friends living close by, easy access to the parental home, an established area and an easy commute all played a role in the decision. 

But take the second client who was motivated by the need for a break in his daily commute from outside London and was happy to take a punt on a longer-term investment.  For him, a whole different area of London opened up and ultimately he opted for Lambeth.  Being open to new areas enabled him to get more property for his money but he was still able to access great restaurants and good local shops and is safe in the knowledge that the property could also be a good rental opportunity.

For the third client, working in the IT industry meant that the more expensive areas closer to the City did not need to be a factor.  In choosing the outer Shoreditch area, he was able to secure a good long-term investment prospect whilst living close to friends.  Edgy and very definitely up-and-coming, Shoreditch is attractive to many for this very reason.

For those purchasing a property for investment purposes it is also important to consider the yield on properties.  In some of these up-and-coming areas it is relatively strong, albeit that you have to weigh this up against securing tenants, something that the more core areas of London find relatively easy to do.

Driven by Cross-rail, investment in new developments, a  desire for convenience, demand for an international offering  and the emergence of new business areas away from the City, a new tranche of postcodes is opening up in London for those looking for better value for money.   But getting the balance right, knowing the right streets to be looking in, understanding which developments are in the pipe-line can be a thin line between getting it right and making a secure investment and getting it badly wrong.

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