As a property portfolio landlord, one of the keys to success is identifying investment opportunities that have the potential to provide attractive returns over time. One strategy that savvy investors employ is targeting up-and-coming neighbourhoods. These areas are often experiencing revitalisation and growth, offering the potential for increased property values and rental income.
In this blog post, we'll explore some of the top areas of London that could work for investors.
Areas to Watch
North London - Tottenham Hale
Tottenham Hale is undergoing major regeneration works at the minute, with thousands of new homes being built. Alongside new residential developments, large-scale commercial works are underway, as well as improved public transport links. Found on the Victoria Line, the area is already an attractive proposition for commuters to Central London, and its proximity to green spaces and the River Lea make it a winner for young families, too.
This is an ideal area for residential and commercial property investors.
East London - Barking and Dagenham
Since plans for London’s largest film studio were announced for Dagenham in 2020, the area has been earmarked for greater investment. The borough is known as one of the cheapest places to buy property in London, and Planners Be First have recently set a goal of 50,000 new homes and 20,000 new jobs in the next 20 years.
With so much hubbub and potential, Barking and Dagenham is well worth a look for investors.
South East London - Lewisham
With new development mooted and the ambitious New Bermondsey micro town on the horizon, Lewisham has lots of potential for investors. The area is already home to some fantastic mixed-use spaces, and we’ve already discussed the benefits of these developments in a recent blog. Another reason investors may look at Lewisham is affordability. With an average property price of £552,922, it's significantly cheaper than the London average, making it one of the most affordable boroughs.
For top-quality units in a great area, Lewisham is a fantastic choice for investors.
South London - Croydon
Croydon’s £5bn+ regeneration programme is already attracting plenty of investment. Buyers want to tap into the low prices and swift commutes into central London, and Croydon excels in both aspects. Though the £1.4bn Westfield Shopping Centre is routinely delayed, the developer is committed to finishing it. This should bring further regeneration to this still-growing suburb, giving greater scope to investors in the area.
Croydon is a more left-field choice for investors in London, but its potential is near-limitless thanks to its transport links and amenities.
Things to Remember
Before diving into any investment, thorough research is essential. Investors should look for signs of economic growth, such as new businesses, job opportunities, and infrastructure development. Additionally, consider factors like population growth, affordability, and rental demand. This groundwork helps to identify areas with the potential for long-term appreciation.
Once a location has been identified, factors including development projects, demographics, and affordability should be considered.
Development projects, such as new retail centres, office complexes, or transportation infrastructure, often act as catalysts for neighbourhood improvement and attract new residents and businesses. Similarly, a changing demographic can indicate a rising demand for housing and a potentially flourishing rental market. Younger populations and professionals are two key audiences to look out for.
Affordability is a crucial factor when investing in up-and-coming neighbourhoods. By evaluating property prices in the area and comparing them to nearby established neighbourhoods, it’s easy to evaluate their potential for growth.
Alongside this, investors also need to mitigate the risks involved when investing in up-and-coming neighbourhoods. It's essential to conduct thorough due diligence regarding crime rates, school districts, proximity to amenities, and the overall condition of the neighbourhood.
What’s Next?
Investing in up-and-coming neighbourhoods can be a lucrative strategy for property portfolio landlords. By conducting thorough research and identifying neighbourhood indicators, investors have a much greater chance of spotting the potential in these areas and boost their portfolio's value. Every opportunity presents risks and rewards, but with the right approach and a keen eye for spotting potential, investors can position themselves for long-term success.
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