London’s “Cinderella” Locations Piquing the Interest of Middle East Real Estate Investors, says UK Property Developer
Barratt London and Rightmove research finds that Middle East real estate investors are opting for regeneration areas with higher yields in London’s outer zones in favour of traditional central London locations
Buyers from Gulf regions now make up 15% of overall sales for Barratt London
Research from Barratt London, which is part of the largest residential property development company in the United Kingdom, and Rightmove, the UK’s largest online real estate portal and property website, have revealed a growing demand from Middle East investors for more affordable, high-quality homes in London’s outer zones.
Stuart Leslie, International Sales and Marketing Director at Barratt London
The ‘Cinderella’ areas, so-called due to their forthcoming transformation, similar to that of the well-known fairy tale, are mainly made up of active regeneration areas that haven’t yet seen huge gains already witnessed in central London, including Chelsea, Belgravia and Knightsbridge.
According to the research, Middle East investors are attracted to areas within Greater London, including Hayes, Hendon, East Ham, Catford, Tooting, Hounslow and Acton, all of which offer a lower initial purchase price and the likelihood of substantial capital gains.
Stuart Leslie, International Sales and Marketing Director at Barratt London, said, “In recent months, due to restricted movement and lifestyle changes, there has been a shift in demand among Middle Eastern buyers towards higher yield, lower-priced properties, indicating a boom in investment purchases.”
“Traditionally, buyers from Gulf regions, who now make up 15% of overall sales, have looked to central Zone 1 areas with many purchasing properties as a second or third home. Now, however, we’re seeing a move towards more affordable, high-quality homes in London’s outer Zones 3-6, which offer rental yields of around 4% – far higher than is attainable in central London.”
The data also revealed investors from Kuwait and Bahrain made up the majority of interest in the lower-price-point, higher-yield products. However, demand has increased from investors from Saudi and Qatar, traditionally focused on prime central areas. UAE investors tend to be expats looking to put down roots in London.
“The Cinderella areas have really piqued the interest of investors from the Gulf region due to the potential returns compared to their glitzier gentrified neighbours where house prices have already reached their peak. As a result, we have seen a clear uptick in enquiry levels and are therefore very optimistic for the forthcoming year where we expect these levels to increase even further,” added Leslie.
JLL similarly predicts that, in 2022, the Greater London area will see growth outweigh that of the rest of the UK – 6% as opposed to 4.5% – and that this trend will continue for the next four years, leading to an anticipated increase in London house prices of 25.8% compared with 21.7% elsewhere in the country.
James Puddle, Founder and CEO of One Global Group, one of Barratt London’s selling agents, says, “London has lagged behind in the property boom of 2021, as buyers and renters looked out of the capital and city centres. However, we have already seen the trend reversing and more people coming back to the capital. We expect London to be one of the top performers in 2022.”
“Buying in London doesn’t need to break the bank, there are a number of locations primed for growth. With the delivery of key infrastructure in the coming years – such as Crossrail – many areas are becoming more accessible and desirable to live.”
Barratt London’s top Cinderella neighbourhoods
Despite being extraordinarily well-connected with no less than seven tube stations, the average house price in Acton remains considerably more affordable than its neighbours: 9.2% cheaper than Ealing and 36% cheaper than Hammersmith. Prices have fallen by 3% since 2016 . However, all that is set to change, with capital growth now predicted to be around 21% in the next five years, along with growth in rental yields of up to 15% in the same period [Source: CBRE]. This is mainly due to Crossrail opening, meaning services from Acton Main Line station will give even faster journey times of nine minutes to Bond Street and 23 minutes to Canary Wharf. As an active regeneration area, developers are piling in.
Leslie says, “Leafy pockets like East Acton are feeling increasingly upmarket compared to previous years, as affluent buyers from neighbouring Chiswick expand their buying borders to get a rung on the ladder.”
Barratt London’s Western Circus development is just a short walk from the tube and includes a Lidl supermarket on the ground floor, 500 cycle parking spaces, an on-site car club and peaceful landscaped gardens. The 364 one -, two – and three-bedroom apartments are selling fast, with over 80% now sold. Prices start from Pound 463,000 (AED 2,222,400) (www.barrattlondon.com or call 0330 057 6666).
2. EAST HAM
According to Rightmove, the average home in East Ham is over 49% cheaper than the overall London average at just Pound 408,451 (AED 1,960,564) (compared to Pound 675,263 (AED 3,241,262). It is one of the most affordable locations in Newham yet sitting in the top four boroughs for the highest volume of new-build homes currently underway.
Leslie commented, “Starting prices are currently below the London average and very affordable, with local investment driven by one of the biggest regeneration masterplans in London. Buyers are clocking on to this hotspot; now is the time to buy here to see the most capital gains. The vibrant community of East Ham has lots of personality too – it’s a Zone 3 location that is going up in value fast.”
East Ham has experienced positive yearly house price growth of 2% compared to its overplayed neighbours like Hackney, who saw a reduction in values by -3%. New Market Place, by Barratt London, is located in the centre of East Ham and will consist of 277 studios, one -, two – and three-bedroom apartments, plus new shops, cafes and restaurants across a 1.9-acre site. Prices start from Pound 320,000 (AED).
Ten minutes up the road is another of Barratt London’s new communities; Upton Gardens, in E13. Located on the former Boleyn Football Ground, 842 new homes are being delivered, with over 70% already sold. Prices here start from Pound320,000 (AED 1,536,000) (www.barrattlondon.com or call 0330 057 6666).
One of the most affordable places in this leafy North London borough is Harrow itself, where prices are rising yearly but only modestly at 3% compared to its more expensive neighbours like Stanmore (9%) and Finchley (4%), as gentrification still beds in. Early-bird buyers have the best opportunity to buy affordably here and feel the benefit of capital growth as thousands of new homes, gyms, cafés, restaurants & a supermarket are all being delivered in this Pound 1.75 billion (AED 8.4 billion) regeneration hotspot.
Situated in Zone 5, but with Zone 2 travel times, Harrow is already an amazing place to live, with lots of green space and 98% of its schools judged as either Good or Outstanding by Ofsted. At the heart of the regeneration area is Barratt London’s Eastman Village scheme, on the site of the former Kodak factory. It will provide 2,000 new homes, plus restaurants, cafes, shops, and offices set around a landscaped park creating a new leisure, business, and residential destination. Homes start from Pound 296,000 (AED 1,420,800) for a one-bedroom SMRT apartment (www.barrattlondon.com or call 0330 057 6666).
Tooting, in Wandsworth, has shown increases of just 2% over the past five years despite being on Lonely Planet’s list of the world’s 10 Coolest Neighbourhoods. But its Cinderella days may soon be over. Tooting is also nearby to desirable neighbourhoods Earlsfield and Wandsworth; according to Rightmove, the average price for an apartment in Tooting stood at Pound 480,271 (AED 2,305,301) compared to Pound 548,911 (AED 2,634,773) in Wandsworth and Pound 517,020 (AED 2,481,696) in Earlsfield in 2022, making the desirable southwest London lifestyle a more attainable goal.
Leslie says, “Tooting is getting 32 acres of new public parkland – the first of its kind since the 2012 London Olympics. The desirability of southwest London has been incredible to watch over the past decade, and Tooting is becoming one of London’s most exciting and vibrant neighbourhoods with markets, independent shops, restaurants and bars popping up all the time. New developments here are still in their infancy, making way for a wave of new residents and amenities for the growing local communities. It’s definitely one to watch over the next couple of years.”
Springfield Place, Barratt London’s development in Tooting Bec on the site of the former Springfield University Hospital, will include 839 homes, complete with an on-site café, retail space, public square, the provision of land for a new primary school, affordable housing and 32 acres of public parkland. Prices start from Pound 455,000 (AED 2,184,000) (www.barrattlondon.com or call 0330 057 6666).
Best of the Rest
“This is a true Cinderella location, often overshadowed by leafier neighbouring areas that feel more gentrified like Chiswick and Turnham Green. But buying in Hounslow means affordable price points and the biggest opportunity for capital growth thanks to a mass of new developments in the pipeline,” says Leslie. “It is changing rapidly – certainly one of London’s most exciting growth areas.”
For sale, High Street Quarter, by Barratt London, is a Pound 210million (AED 1,008 million) mixed-use scheme, creating 588 new homes, a plethora of new shops, including a multiplex cinema, set around a new town square. Prices start from Pound 325,000 (AED 1,560,000) (www.barrattlondon.com or call 0330 057 6666).
“Hayes is a rarity,” according to Leslie. “It’s on the Crossrail route, but with an average property price below the Pound 400k (AED 1.92 million) marker, it offers a meaningful alternative to overpriced neighbours like Northwood and Ickenham. The investment committed to regenerating Hayes is remarkable, having seen the most growth in the past decade compared to all of its Hillingdon neighbours.”
Leslie continues, “There isn’t anything like Hayes Village for sale at the moment, with the structural proportions of the Edwardian era combined with the pristine finish of a new build.”
For sale, Hayes Village, by Barratt London, is the redevelopment of Nestle’s original Art Deco chocolate factory, spanning over 30-acres and creating over 1,500 homes. The development will benefit from a 1.3 km walking trail, a 200m running track, the redevelopment of the canal frontage, a new public square, and a convenient footpath from the historic green to Hayes and Harlington train station – a key beneficiary of Crossrail. Prices start from Pound 352,000 (AED 1,689,600) (www.barrattlondon.com or call 0330 057 6666).
“The transformation of Wembley started in 2002 and is not due to complete for five years, so there is still a long way to go until we see Wembley’s regeneration hotspot fully come to life. Residents should still see sizeable capital growth on their purchase as the area’s monumental urban regeneration project reaches its pinnacle,” says Leslie. Wembley Stadium continues to host major global events from sports to music and is one of the UK’s biggest shopping destinations.
For sale, Barratt London’s No. 10 Watkin Road comes with all the benefits of being at the heart of a thriving cultural scene. Prices start from Pound 364,000 (AED 1,747,200) (www.barrattlondon.com or call 0330 057 6666).
“We’ve had first-time buyers here who bought early and have been able to become second steppers in just a few years due to the rapid house price growth of the area. Our site at Hendon Waterside shows the real transformation here. Starting in 2012, the average property price in the scheme was Pound 222,943 (AED 1,070,126), and by 2019, that grew to Pound 468,709 (AED 2,249,803), meaning a 110% appreciation in capital values. The surrounding boroughs of Brent and Barnet saw increases of 50% and 44.5%, showing clear advantages to investing directly in regeneration areas,” says Leslie.
For sale, Hendon Waterside sits on the tranquil banks of the Welsh Harp Reservoir and will consist of over 2,000 new homes, a new school, supermarket and much more. Finishing in 2028, prices start from just Pound 411,000 (AED 1,972,800) (www.barrattlondon.com or call 0330 057 6666).
All prices in dirhams correct of 16 March 2022.