Is London's East End The New West End?

London property developmentIs London’s East End turning into the new West End? Central London prices have continued to rise so investors, creatives and young buyers have been heading east. Property renovations of industrial sites, council tower blocks and dock basins converted into plush new executive flats that are sprouting in spite of the recession. If you are looking for affordability, the only way is east.

"We now have an incredibly diverse cross-section of people buying," says Matthew Leitz of Savills’s Docklands team. "Around Canary Wharf and the Isle of Dogs we have people in financial services and banking, and a lot of internationals. All the creatives are being displaced from Islington into Hackney, Victoria Park and Dalston. Then, as people can’t afford the inner East End, they look to places like Greenwich, Deptford and Lewisham." A huge amount of property development is in the pipeline as well.

Investors are particularly wise to the new buzz out beyond the City, yet to many people the East End is still unknown territory. "Around 40 per cent of our sales are to owner-occupiers and 60 per cent to investors especially property developers," says Leitz. The Olympics, the cable car from Greenwich Peninsula to the Royal Docks which will open next summer, and life-changing improvements to public transport are making it exciting.

London property developers, say rental yields here are 6.1 per cent to 6.7 per cent, rather than the just over five per cent that you would expect in the West End of London. Most are sold, but you can still get a one-bedroom apartment at £235,000

Another boost is Stratford’s rebirth as one of the top-five transport hubs in the country, wired into the Central Line, Jubilee Line, DLR and, with Crossrail to come, only seven minutes to the Eurostar terminus at St Pancras.

First-time buyers take shelter in the lower prices. The commute from Canada Water to the City is easy and there is also easy access to areas like London Bridge, Canary Wharf and Shoreditch. The new connectivity is what it is all about. One-bedroom flats start at £253,000 – not enough to buy a garage in Covent Garden or Chelsea. Five-year guarantees on appliances, a swish gym, concierge, breathtaking roof garden and underground station on the doormat have brought oriental buyers in droves. Savills’s The World In London report shows that the Chinese eschew the stuffy old squares and mansion blocks of the West End for newly minted flats in the east. They tend to be young, twentysomething, newly rich and, says the report, "56 per cent are testing the market at low price levels"

How does it perform compared to west London? "West End prices went up 34 per cent last year, ours in Maple Quays went up 12 per cent over two years, and in Dalston they were up 20 per cent in three years," says Gerald Thomas, regional sales manager of Barratt. "There is huge potential for London property developers in the renovation market, new build developers, investors and home-owners in the years ahead."

Contact EDL to discuss development or renovation of your London property today!