And that’s why smart buyers pay attention to infrastructure. Improvements to transport, retail and civic amenities can change the fortune of a borough, drawing investors to previously unfashionable areas.
Polishing the halo
“New-build often has a halo effect,” says Peter Izard, business development manager at Investec. “Beautiful, high-spec developments are inherently attractive, and usually come alongside infrastructure improvements and employment opportunities that draw ever more people in.”
Our research shows buyers at the upper end of the market prize good transport links. But they also value size, unique features and outdoor spaces.
So it’s hardly surprising that new-builds increasingly tend to have iconic designs that redefine the local skyline – just think of Renzo Piano’s The Shard in Southwark, or Canary Wharf’s upcoming One Park Drive, a circular tower by Swiss architects Herzog & De Meuron.
Distinctive architecture often comes with beautiful landscaping, think Jellicoe Gardens or Handyside Gardens in King’s Cross; striking art installations, such as Greenwich Peninsula in North Greenwich; or both, like St Alban’s One Gabriel Square, which features three works by sculptor David Harber.
However, new-builds add more than just aesthetic value to their neighbourhood. Many developers now package their residential units with shops, restaurants and services. It’s easy to see why. Our research reveals that over three-quarters of HNWI buyers see a ‘desirable location’ as more important than it was 10 years ago – and a vibrant atmosphere, great entertainment and easy access to good facilities are all key ingredients that make an area highly sought after.
Wembley Park’s 85-acre regeneration, for example, encompasses culture and entertainment venues such as Second Floor Studios – affordable spaces for artists – the Troubadour Theatre and Boxpark, a massive event and street-food hall.
Facilities, facilities, facilities
It’s not just transport, shops and greenery. Civic facilities such as schools are accompanying these new developments. Wood Wharf typifies this focus on the wider amenities – allowing residents the facilities they need on their doorstep. The new residential development by the Canary Wharf Group centres on One Park Drive, and will have a new primary school, a GP surgery and 380,000 square feet of boutiques, restaurants and other retail space. This is all in addition to the five shopping centres and more than 300 shops and places to eat and drink that are already open on the existing Canary Wharf estate.
Once residents move in, their presence often drives upgrades to transport, education and amenities, which make an area even more desirable.
And if a new school gains an Outstanding rating from Ofsted, for instance, the impact on local property is as large as it is immediate. According to a study by the Department for Education last year, prices are 8% higher near the best-performing primary schools and 6.8% higher near the best secondary schools. But other studies found local effects can be even more dramatic, with one study showing a 17% boost for house prices in sought-after school catchment areas.
New-build’s virtuous circle
Major regeneration projects are the ultimate expression of this virtuous circle. They often feature a combination of high-profile new-builds, restaurants, shops and prestigious office space; brand new transport and street facilities; new civic amenities; and tend to be in neglected but attractive locations.
Our research shows that in the London borough of Tower Hamlets, new-builds essentially created a prime market where there was none. Just 42 sales at Meranti House, in Tower Hamlets’ Whitechapel area, accounted for 15% of the borough’s £1 million-plus property sales last year. Like many London regeneration projects, these new-builds offer great access to the centre of London, local history and culture – and the influx of residents support new retail and amenity providers.
Some emerging locations are not on the radar of prime property buyers yet. Only 4% of our survey respondents see Tower Hamlets as prime in the making, for example, while Waltham Forest garners a meagre 2% – even though our research identifies both as future property hotspots.
But the new developments in these boroughs suggest this perception will change soon. Then look further afield – at the new garden towns being planned, for example – and it’s clear there are plenty of ground-floor opportunities for buyers in locations that offer the profile they’re looking for.
