[vc_row][vc_column][vc_column_text]A LOT has been happening in East London. Previously eclipsed by the glamour of the West End, the East End has become the centre for the hip, happening, creative and innovative. East London is home to up-and-coming areas like Poplar and Aberfeldy Village.
More are choosing to reside in the East because of its relative affordability compared to the West, the gentrification that’s sweeping through and the creation of more jobs through developmental initiatives like Canary Wharf, East Bank, Stratford and the Asian Business Park. Some of the world’s largest tech companies like Google’s Innovation Hub and Amazon have also made their home in the East.
This short case study covers the following:
- Poplar: population density & house price growth
- London property price & rental growth
- Vacancy Rate
Population Growth Drives Housing Demand & Prices
One of the UK’s most densely populated local authorities, Tower Hamlets, is located in East London. Over the past 30 years, the population of Tower Hamlets has more than doubled boasting a density of 16,237 persons per square kilometre. Projections by the Greater London Authority suggest that the population will increase by a further 16% by 2030—an equivalent of 14 residents per day until 2030!
At the administrative centre of the borough is Poplar. Poplar has been identified as a major district centre in the London Plan, designated in 2004 as an Opportunity Area (OA)* and part of the Thames Estuary Growth Corridor with potential for 9000 new homes and 3000 new jobs by 2041.
Up to 2,800 new homes will be built on a 20-acre site of the previous Poplar Gasworks grounds in Leven Road, known as Poplar Riverside. Developed by the National Grid and Berkeley Homes, Poplar Riverside features topnotch riverside residences and world-class residential facilities, and will eventually include a school, offices, shops, F&B and a riverside park with a new walkway within the area. Poplar Riverside will also benefit directly from the 12-year £250 million regeneration at Aberfeldy Village, located very close by.
Increased Housing Demand & Price Growth Expected in Poplar
Poplar Riverside on Leven Road falls within the Core Study Area (CSA) of the London Plan 2021. The area is densely populated at an estimated 163 residents per hectare, i.e 35% higher than the average of inner London and approximately 3x higher than the London average!
High population growth has caused demand for property to surge and significantly pushed up house prices in the area over the years. Between 2010 and 2020, sales values for new residential properties in the CSA increased by a whopping 105%, with the average property sales price growing from £518,033—an average of year-on-year growth of 9%, compared to £252,862 in 2010. Back then, residential housing consisted primarily of older council stock; it was only recently that there has been significant new residential development.
While Poplar hasn’t had the best of impressions due to its past reputation as a traditionally working class community and home to dock workers; the newer, high-end apartments and condos built in the area have attracted professionals working in Canary Wharf and the city. The wave of professionals moving in helps to further contribute to ongoing gentrification efforts in the area. Not to mention, Poplar’s Zone 2 postcode is highly attractive and extremely well-connected to the rest of the city by public transport links.
Poplar: Yay or Nay?
With life and work now back to normal in the UK since the pandemic, more have returned from the outskirts to the capital. The UK labour market has certainly staged a comeback from Covid in 2021 as demand for workers increase on the back of labour shortage as a result of Brexit. Financial job vacancies in London, especially, have surged beyond pre-pandemic levels to around twice that in 2020.
Overall, vacancy rates in London are at a tight 2.2% as the capital faces a shortage of homes and rents increase to its highest since 1999. London rents (excluding brand new homes) are predicted to increase by 19% between 2020 and 2025 as housing construction struggles to meet the 90,000 – 100,000 new homes needed yearly to meet demand (only 41,718 completions were recorded in London in the 2019/20 period).
London property prices are starting to grow again following a period of flat growth, and if you are looking at investing in the capital, East is certainly best when it comes to value for money.
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*Opportunity Areas (OAs) are identified in the Mayor’s London Plan as key locations with potential for new homes, jobs and infrastructure of all types. Many are linked to existing or potential public transport improvements and typically have capacity for at least 2,500 new homes or 5,000 new jobs, or a combination of the two.
By Vivienne Pal