Arthur takes a look at Barking, its regeneration plans, and why it has been named London’s newest buy-to-let hotspot…
A suburban town in the East London within the London Borough of Barking & Dagenham, typically, Barking has been recognised for being run-down and relatively unattractive. But in recent years, its image has been on the rise, mainly due to the confirmation of regeneration projects in the surrounding area.
Barking Riverside regeneration project:
L&Q’s development project, covering a 443-acre Brownfield site, promises to transform the entirety of Barking’s waterfront area, which is close to both the town centre, City of London and Canary Wharf. The vision takes inspiration from Barcelona’s waterfront housing developments, and upon completion, it should accommodate 26,000 people living in 10,800 homes. According to the Mayor of London, Sadiq Khan, 50pc of these new homes will be “affordable” for both first-time buyers and those looking to rent. This is a great improvement on Boris Johnson’s earlier collaboration with the project, which capped affordable homes at just 28pc. The 2016 amendments to the project’s Masterplan now include strategies to incorporate a new London Overground station into the centre of the site, extending the Gospel Oak to Barking line where it will terminate the new Riverside station. The project has thus far delivered 700 occupied homes, the construction of the remaining homes and the development of a secondary school with an 1,800 pupil capacity are well underway, with bulk of this building work expected to be completed by the end of 2017.
Town centre regeneration project:
Barking’s Council are also investing heavily in improving Barking’s once-dreary town centre. Receiving over £2 million from the Mayor’s Outer London Fund, the Council has also made significant contribution to this project, facilitating the creation of 4,000 new homes, new public spaces, transport routes, creative designs for shop frontages, a community festival and a unique bathhouse, as well as longer-term solutions to add to the dynamism of the area.
Whilst recent months have seen significant falls in buy-to-let property sales due to uncertainty over the newly introduced tax changes for landlords, as well as last year’s 3pc increase in Stamp Duty tax, Barking is still a promising investment opportunity. Savills’ Lucian Cook suggest that landlords should seek out inexpensive properties in areas with strong rental markets in order to get the most of of their buy-to-let investments – “low-value properties have a higher yield and will also give you more borrowing ability”. Barking is also an area with a strong property prices increases, coming in at a staggering 11.2pc in the year up to October 2016. This means that landlords looking for buy-to-let properties in this area of London are guaranteed healthy profits. Recent finding have shown that investors who spend up to £272,000 on a two-bedroom flat in the Barking area can expect to earn over £15,000 per year in rent, providing a yields of 5.6pc on average.
As the Barking Riverside regeneration project reaches completion, transport links continue to improve, and the town centre continues its development into an attractive and exciting area, property prices – and indeed rents – are set to continue rising. If you’re looking to expand your rental portfolio, Arthur would suggest investing while prices remain low!