London property: the rise of the Overgrounders
The London Overground or "Ginger Line" is opening up new areas of London for savvy house buyers
Overground train in London. Property prices are rising on the 'ginger line'
All aboard: the market is moving fast in areas near an Overground stop, like Hackney and Wandsworth Photo: Alamy
By Caroline McGhie
Huge property price rises in central London are forcing young professionals away from the Tube lines into previously unfashionable areas served by overground trains. Areas around the London Overground (dubbed the "Ginger Line" because of its colour on London Underground's map) and other lines into London Bridge, Charing Cross and Victoria, are being colonised as gentrification spreads to the capital's outer fringe.
Research by Hamptons International shows how hard resourceful Londoners are looking for better value. While the heart of the city is becoming the preserve of internationals and absentee millionaires, the outer suburbs are beginning to buzz. Their image, long seen as run-down and dreary, may finally be about to change.
"Since the London Overground has been included on the London Tube map it has had a big impact on attitudes and a big effect on all the areas it runs through, particularly in south London," says Johnny Morris, Hamptons' head of research. "For people looking for value it offers good houses for not so much money. There is definitely a flow from central to inner London, and from inner to outer London."
Some areas served by the overground have become so popular that values have already risen. Both Hackney and Wandsworth saw prices go up by around 17 per cent last year. "Gentrification has already taken root in Hackney, possibly because it is so close to the centre and the journey times by bus or overground are short," says Johnny. "But in areas like Hackney and Wandsworth the market is moving so fast that it puts people off. You hear stories of 20 sealed bids for a flat which sells for 20 per cent above the asking price."
James Hyman at Cluttons is watching Forest Hill, on the borders of Lewisham and Peckham. "Price rises in the last part of 2013 led buyers to consider areas further out, where they can get more for their money," he says. "Forest Hill has benefited from improved transport links and has seen increasing numbers of people moving in who have been priced out of other fashionable parts of south London like Brixton and Peckham."
Developers are already targeting the area, delivering the high standards that new Overgrounders want. Grangewalk Developments has built a sleek block of two-bedroom apartments with underfloor heating, private terraces, parking and bike storage, provisionally priced at £385,000 to £435,000. The area has hilly parks, the charming Horniman Museum and is a stone's throw from the Dulwich schools and art gallery. Trains run into London Bridge or along the London Overground extension through Whitechapel to Highbury & Islington.
Square-mile workers who can't afford Islington or Canary Wharf are turning south, too. In Lewisham, just opposite the DLR and train station (with lines to Victoria and Charing Cross), David Cormell, 24, a City technology analyst, has bought an apartment, with the Help to Buy scheme, at Barratt London's Renaissance development. He paid £285,000 for two bedrooms with a 24-hour concierge and life is good. He swims in the nearby Glass Mill leisure centre and has taken up Bollywood dancing.
Lewisham lad: David Cormell
He didn't want to move right out of London and take on a long commute. "I work long hours and want to save time to do the things I enjoy. Lewisham is connected so I minimise travelling time to maximise my spare time at evenings and weekends," he says.
The rise in Overgrounders is affecting the rental market too. A recent report from Benham & Reeves showed that prime London had peaked, and rental values fell in the poshest parts at the end of 2013, while outer London rose – most of all in Greenwich, where rental values jumped by 16 per cent. "We have 11 applicants for every property on our books, many wanting better value and lower cost," says Marc von Grundherr of Benham & Reeves. "It is around 20 per cent cheaper than Fulham but a one-bedroom flat which cost £300 a week last June will now cost £350."
The massive increase in the number of renters overall has been charted by Stephanie McMahon, head of research at Strutt & Parker, who found that two of the most popular areas were Barking and Dagenham, where renters had increased by 231 per cent in the past decade, and Tower Hamlets where they had increased by 160 per cent.
It doesn't follow, however, that renters turn into buyers in the same area. Renting is currently cheaper than buying, so prospective buyers have to look farther out. Bromley, just 23 minutes to London Victoria by train, is turning into another nappy valley. New flats in a gated hillside development called The Ridge are about to launch (Affinity Sutton sales: 0845 600 0787) at £170,000 for one bedroom and £185,000 for two. Croydon is another Overgrounder hotspot. Massive investment has resulted in vast shopping malls and tower blocks full of smart new flats. Fast trains from East Croydon zip into London Victoria in 15 minutes and to London Bridge in 13. From West Croydon station they link to the London Overground extension and all stations to Highbury & Islington.
Top 10 Overground hotspots
Average prices: 2-bed £172,000, 3-bed £233,000 Moving in: 11,100 from UK (7,269 from London)
Average age: 33.6 (36.2 for Londoners)
Average prices: 2-bed £230,000, 3-bed £313,000 Moving in: 16,700 from UK (10,964 from London)
Average age: 34.6 (36.6 for Londoners)
Average prices: 2-bed £196,000, 3-bed £254,000 Moving in: 19,400 from UK (12,982 from London)
Average age: 32.8 (36.3 for Londoners)
Average prices: 2-bed £205,000, 3-bed £253,000 Moving in: 17,400 from UK (11,318 from London)
Average age: 30.2 (34.6 for Londoners)
Average prices: 2-bed £272,000, 3-bed £336,000 Moving in: 18,900 (12,214 from London)
Average age: 29.6 (32.8 for Londoners)
Average prices: 2-bed £227,000, 3-bed £278,000 Moving in: 17,200 (10,325 from London)
Average age: 31.3 (35.6 for Londoners)
Average prices: 2-bed £315,000, 3-bed £387,000 Moving in: 30,100 (18,698 from London)
Average age: 31.3 (35.3 for Londoners)
Average prices: 2-bed £231,000, 3-bed £308,000 Moving in: 20,800 (14,241 from London)
Average age: 31.1 (34.7 for Londoners)
Average prices: 2-bed £208,000, 3-bed £288,000 Moving in: 10,700 (6,770 from London)
Average age: 33.7 (35.6 for Londoners)
10. Waltham Forest
Average prices: 2-bed £224,000, 3-bed £296,000 Moving in: 14,400 (10,256 from London)
Average age: 31.7 (34.3 for Londoners)