Why investing early in large scale regeneration sites can mean the ultimate uplift for property investors?
May 30, 2023
Why investing early in large scale regeneration sites can mean the ultimate uplift for property investors?
Largescale sites of regeneration tend to be classified as having over 1,000 homes. Hendon Waterside, our current new launch fronting the Welsh Harp Reservoir in NW9 will provide 2,000 homes when it’s completed; making it not only a major site of regen with more than £7 billion invested, but a major new residential community for North London.
So, what are the advantages for an investor looking at such a scheme? Does the volume of new houses leave room for capital appreciation?
We understand why some investors may be hesitant. Buying in a development where there are thousands of homes for sale might seem inimical to the laws of supply and demand. As a property investor you might worry about competition for tenants from other landlords and also potential resale prices if you want to sell. But the figures would suggest otherwise. Demand for rental properties in London is at an all-time high – London is now a majority city of renters,as opposed to owner occupiers. If anything, you’re likely to see a queue of potential tenants ready to view your property – in particular, a quality new-build that’s cheap to run like the EPC Rated B apartments at Hendon Waterside. So that argument doesn’t really stand up to the chronic dearth of supply of quality new build homes to rent in London.
In a study looking at the increases in pounds per square foot for four of London’s major residential regen schemes (all by Berkeley Homes) the price growth ranged from 29% to a whopping 62% over an eight-year period. The one that performed the best being Woodberry Down, which we think is very similar to Hendon Waterside. In another study of 11 schemes, CBRE found that regeneration programmes led to annual uplift of 3.6% over a nine-year period. A 62% rise over an eight-year-period is certainly not to be sniffed at!
“In the context of huge regenerations schemes scheduled to build over 5 to 10 years, the sole developer can take on a dollar-cost averaging approach and adjust each unit price over different phases of building construction. This takes into account rising costs of labour and materials and growing land value as the infrastructure gradually nears completion. The bottom line is that investors who have bought units of the new property gains from a first-mover advantage, reaping maximum profits.”
— Knight Frank
Average house prices increase comparison: UK, London and Hendon Waterside 2011-2022
UK AVERAGE
53%
London average
88%
Hendon Waterside
132%
So, it would seem, that major areas of regeneration – in particular those located in London, offer investors unrivalled opportunities to make the most gains over a medium to long term strategy.
Proven capital growth at Hendon Waterside
For more information on Hendon Waterside, click here.
For any questions you have or figures you’d like to see, don’t hesitate to speak to one of our agents.
GEORGE RADFORD
about the AUTHOR
George is the co-founder of RPA Group and Managing Director of the business in the UK and Africa. A qualified Chartered Surveyor (MRICS) with almost 20 years of property investment experience, George has helped his clients to successfully grow and strengthen residential property portfolios over multiple markets and territories. Active in building and advising upon his client’s investments, George is now focusing on procuring UK investments exclusively for RPA Group clients and investors, providing insightful and strategic advice and opportunities.