Is the Shoreditch property gold-rush over?
Wed 27 Jan 2016
The Shoreditch gold rush is over. The cradle of the great east London property boom and honeypot for hipsters isnow suffering from Mayfair syndrome - the stalling of property values in Londons most exclusive areas. Pricesin EC1 grew at a below-inflation two per cent last year, down from the stunning 18 per cent growth in 2014.
The rise and fall of Shoreditch mirrors the fortunes of prime central London, where experts say unrealistic priceshave driven buyers away. Earlier this month a disused public lavatory in E1 went on sale at 1 million .
Faltering prices will please anti-gentrification activists who last September marched on the Cereal Killer Caf inBrick Lane carrying pigs heads and torches before being driven off by riot police. The caf was targeted after itopened serving a menu of breakfast cereals, some at 4.40 a bowl.
Martin Phillips, manager of estate agent Fyfe Mcdades head office in Shoreditch, said: In 2014 whatever we puton the market would sell, whatever the price. We were block booking 30 viewings and expecting best and finaloffers above the asking price.
This kind of heat, believes Phillips, caused many first-time buyers simply to give up on the area. He believes thedays where you could get 25 to 30 per cent growth in a year are past. He added: It is the kind of market whereyou have got to be in it for five or 10 years. Market watchers say young creatives are heading further east orsouth of the river to Bermondsey to find better value and an arty vibe.
London house prices: the average cost of buying in every borough (January 2016)
However, Mark Kempson, sales manager of Marsh & Parsons, believes the early part of this year could see apick-up in the Shoreditch market, where property currently costs from 800 a square foot for an ex-council flat upto 1,200 for a warehouse loft. There has been an increase in investors due to the changes in stamp dutylegislation which will be coming into effect in April, he said. It is believed buy-to-let investors, who will have to
pay higher stamp duty rates from April 1, still feel there is good money to be made in the area.
This year protest is likely to centre on development plans for the Bishopsgate Goodsyard site which runs fromShoreditch High Street to Brick Lane. Developers Hammerson and Ballymore hope to put a dozen buildings of upto 47 storeys on the site, which would be the first large-scale housing development in the area.
Hackney and Tower Hamlets councils are not happy with the proposals, however - in particular, with theproportion of affordable housing. Jules Pipe, mayor of Hackney, condemned the proposals as developerscashing in on luxury flats way beyond the means of most Hackney or Tower Hamlets residents.
Both councils have rejected the plans. However, London Mayor Boris Johnson has decided to call in theapplication, so the matter is out of their hands. A decision is expected before the capitals mayoral election inMay.