Historically, the River Thames has always played a pivotal role in London’s fortunes. It is widely believed that the Roman Empire established London on the banks of the capital to take advantage of its tides and throughout her history, the capital relied on the river for its commerce and trade.
As London’s profile as an international trader diminished, the Thames and all the purpose-built property along her shores required repurposing, which has led to a boom in property values in boroughs along the Thames, according to a recent report by Savills.
Regeneration and development
In eastern boroughs, such as Southwark, Lewisham and Tower Hamlets, the riverside market features an eclectic mix of new build developments and warehouses and industrial conversions. With the regeneration of previously unused or derelict properties now a big fashion for developers and investors alike, it's an exciting time for our local property market.
There is also a proven track record for London’s waterside properties. Statistics provided by Savills, show that overseas buyers and tenants make up the highest percentage (59% and 61%, respectively) of the prime sales and lettings markets. Statistics also show that more than half of all prime buyers are owner-occupiers with the other half split evenly between investors and second-home buyers.
Why the river?
At first, it might seem like a strange location to choose to live near! However, the desirability of river-side property is linked to the unique lifestyle the river has to offer. Its central location gives commuters a home close to the bustling financial centres of London such as Canary Wharf, as well as alternative forms of transport (such as the increasingly popular River Bus). There is also the more niche benefits on offer, such as outdoor space, state-of-the-art facilities and commodities and private moorings for prospective buyers with their own boat!
These premiums allow property owners close to the Thames to command a higher asking price on their properties, with sellers and investors in the south-east usually being able to add a 15.6% premium to the value of their property.
High-value properties
As more property is constructed and renovated along the shores of the Thames, the value of property further inland within our boroughs continues to rise, with thousands of properties sold for over a million pounds over the last ten years.
According to research performed by the BBC, Southwark has played host to the sale of over 2,062 properties worth over a million pounds, whilst Greenwich and Lambeth both oversaw the sale of 2172 and 2171 million-pound properties, respectively. This is great news for sellers, as all three boroughs continue to see investment in the area, in the form of new developments and the regeneration of areas along the Thames, which is driving property values even higher.
Experts at Savills believe that property prices in the boroughs along the Thames will continue to remain steady, with only slight fluctuations of 2% in value over the next two years. However, by 2020, they expect prices to continue on their upwards trend.
So, what’s the outlook?
With house prices remaining steady, we would recommend that investors and landlords play the long game. With property values predicted to remain steady throughout the current development phase, investors can purchase property at a good price, and then wait for the market to reboot in 2020. Additionally, over the last six years, rent in Lambeth and Southwark has risen by a massive 30% and 23% respectively, with the experts at GMB only expecting them to rise further.
On the other hand, whilst the rent has risen significantly in the two boroughs, rental properties in the area remain some of the cheapest along the Thames. The average monthly rent for a property in one of the central boroughs currently sits at &1706. At the moment, it currently costs less than &1600 a month to rent in Lambeth or Southwark.
If you are looking to sell or let in London, then Coldwell Banker Southbank’s “7 things to know before you instruct an Estate Agent” will be insightful. Reply to this e-mail or call us on 0203 600 1906 to request your free complimentary guide today.
