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We have mapped the Thames between Teddington Lock and the Royal Docks and pinpointed every flat* that sold within 100m of the river in 2012 and those that sold in the surrounding area, up to 1km away. We found that there was a clear price premium for proximity to the river of an average 13.1% across London, although substantial variation occurred between different areas, as illustrated in Table 1.

Geographical variation

To the south west, between Teddington and Wandsworth Bridge, flats within 100m of the river commanded a 19.4% premium over those in the surrounding area. The Thames has been an important factor in the development of the south west London wealth corridor. Areas such as Barnes, Chiswick and Putney have become increasingly gentrified in the last 10-15 years. In the past five years, prime property prices in Chiswick have increased by 46.2%, whilst values in Barnes and Putney have increased by 42.4% and 52.6% respectively.

Between Wandsworth Bridge and the London Eye, central waterfront flats on the north bank of the river commanded a 16.3% premium. This slightly lower level premium is largely due to the proximity of super and ultra prime flats in prime central London (PCL). Average prices on the river suggest there is still some value to be had; for instance in the area around Pimlico the average price of a flat is £630,000, compared to £1.84m in Knightsbridge. In contrast, to the south of the river in central London, the premium for a central waterfront flat is 35.4%, the highest of all areas in London as a result of ongoing regeneration of the riverfront.

To the east, flats within 100m of the river commanded an average 29.1% premium. Period conversion and redevelopment have allowed once industrial locations to embrace their architectural roots and the proximity of the river to become new prime areas. Initially restricted to the areas surrounding Canary Wharf, gentrification has now spread to areas such as Wapping and Surrey Quays.

Unique characteristics

In addition to substantial variation across the capital, less quantifiable attributes, such as river views, private jetties and access to a pier, enable properties to command higher but more variable premiums. A property with direct river views can cost 18-20% more than a similar property without river views, perhaps only a street away.

New developments can command a premium for height, with the most extreme differences in value achieved on higher floors. The specific tailoring and high specification offered by some prime new developments can also see a premium for scale, measured in terms of an increase, rather than a decrease in price per square foot, especially where the acquisition of an entire floor offers panoramic views.

* Given the geographical distribution of different types of stock only flats have been included in our analysis in order that the values used to calculate premiums are not distorted; flats accounted for 87.3% of sales within 100m, but only 68.0% within 1km of the river in 2012.

Taken from
Spotlight: Waterfront London