The Elizabeth Line may be the new purple Tube line with the royal seal of approval, but where are the buy-to-let hotspots along the new ‘Lizzie line’? We asked Robert Nichols, managing director of London estate agents Portico, to identify the areas that he thinks are worth investing in?
Rightmove recently reported that asking prices for homes along the ‘Lizzie line’ have soared by up to a third in the last 12 months, and they are continuing to rise, with analysts predicting average price increases of £133,000 between now and when the line launches in 2018/19.
If you, as a buy-to-let investor, are looking to benefit from both capital growth, high yields or both, here is a list of top buy-to-let hotspots that you may wish to consider.
Forest Gate has enjoyed significant gentrification over the past few years, thanks to the Olympic Games and the opening of Westfield shopping centre. The anticipated arrival of Crossrail is now gentrifying the district even further, and making the area extremely attractive to tenants looking for affordable accommodation.
The transport links appeal to tenants, too. There is an Overground train to the City that takes 13 minutes, and when the Elizabeth line opens, locals will be able to catch a train to Tottenham Court Road in just 17 minutes. The Zone 3 district also offers a wealth of affordable, Victorian houses, and is a haven for investors. The average price of a two bedroom property currently stands at £275,000 and yields in the area stand at 4.7% according to our interactive yield map. We predict property prices to rise by 10% by the time Crossrail is complete.
Farringdon is set to become one of Britain's busiest train stations, and the only station from which passengers will be able to reach three London airports, plus access Crossrail, Thameslink and Underground trains.
Investing in central London in the areas around Tottenham Court Road such as Fitzrovia and Bloomsbury and towards the City in Farringdon have not been considered risky but rather stable in terms of the potential for assured capital growth in recent years, increasing on average by 5% every year in value. The Farringdon area guarantees to produce a good return in rental income, due to the continuously increasing demand to live in central areas close to the commercial and transport hubs and Universities - and landlords in the area experience, on average, only a one week void period between tenancies.
The desirability of the area is being enhanced by the Crossrail development, which will improve connections to these areas from outer areas of London, and encourage further investment and economic growth.
Thanks to regeneration and slashed journey times, the areas on the western part of the new line have seen huge property price growth. Acton Main Line, with journey time savings of about half an hour, is definitely one to watch. Transport infrastructure and regeneration is making a real difference to Acton, and there are some extremely desirable areas to live, such as Poet’s Corner, the Mill Hill Conservation Area, or anywhere along the Bedford Park borders due to the recent demolition of the South Acton Estate. The area directly around the imminent Crossrail station is also extremely sought-after. A huge numbers of savvy buyers have already put down roots in the area, and the average two bedroom, purpose-built property stands at a reasonable £400,000.
Properties around Acton Mainline station fetch healthy yields of 4%, but yields are highest around the western end of Uxbridge road at 4.6%. We expect property prices in Acton to have risen by at least 15-20% by the time Crossrail is complete.
Ilford will finally be on the Tube map as a result of Crossrail. Though it is not considered one of the most elegant places to live, it is certainly becoming gentrified as a result of TFL’s transport plans, and is one of the most affordable places to live in London - which is a huge plus for tenants.
New build apartments, trendy eateries and bars are shooting up in the east London borough, signalling that a wave of new investors andtenants will soon be moving in. As mentioned, it's one of the best-value areas in London, and though property prices have been rising since the announcement of Crossrail, the average price of a two bedroom property in the area is still a reasonable £280,000. We predict property prices to rise by 10% in the run up to Crossrail completion, and expect the area to prosper as a result, so it is a brilliant place to both live and invest.
Romford is becoming an increasing popular choice for tenants, as many are being driven out of the capital because of rising rents. The Essex town offers affordable rent, a quick commute, (you can get to Liverpool Street in 20 minutes), and a wealth of trendy cafes, delis, late night bars and independent shops and boutiques.
House prices have already reached record highs in the area due to infrastructure plans, but we predict they will continue to soar until Crossrail is fully operational in 2019. An investor can pick up a two bedroom property in the area for around £227,000.
Robert Nichols is managing director of Portico, with branches in Acton, Battersea, Bloomsbury, Camden, Clapham, Dulwich, Fulham, Hammersmith, HighburyIslington and West Hampstead.