Our latest Spotlight focuses on the desirability of waterfront living and why London's riverside is proving popular with a diverse range of buyers. Download here.

The properties on offer along the 27-mile stretch of river between Teddington Lock and the Royal Docks are extremely variable. This gives each area a distinctive and varying character.

In the south west the proportion of period stock is high. The majority of properties fronting the river are large houses, built over a century and a half ago, with gardens stretching to the water’s edge. In central London most period properties were built set back from the embankment and arranged in rows of terrace. New development schemes have been able to build right to the water’s edge on both north and south banks, affording uninterrupted views of the Thames. To the east new schemes are interwoven with repurposed and renovated industrial buildings built straight up from the riverbank and surrounded by canals and dockyards.

Despite these distinctive characters the waterfront has a wide appeal, with 78% buying in areas they hadn’t previously considered, although there are some identifiable trends in buyer and tenant types.

South West London

The south west waterfront market is more domestic than either the central or east London markets. 70% of buyers of second hand waterfront stock in 2012/H1 2013 were from the UK and 79.2% were owner occupiers. Domestic markets have performed strongly in the last year with price growth of 11.8% across south west London. Equity rich buyers who already live in London have been displaced out of PCL, relocating west in search of more space and seeing the value upsizing here can offer.

Interestingly however, the south west waterfront market is slightly more international than the wider south west market where 74.2% of buyers in the same period were from the UK. Greater numbers of international buyers, in Fulham for example, have contributed to increased property prices.

The south west waterfront market also has a higher proportion of investors. In September 2013 the average gross yield across prime south west London was 3.4%, but gross yields of up to 4.2% can be achieved for prime waterfront. Demand for family housing in the south west rental market is strong and top-end corporate renters will pay a premium for waterfront living. 55.6% of south west waterfront tenants have relocated for employment. In the wider south west only 7.7% of tenants are employment relocators.

Central London Waterfront

The proportion of residential stock along the banks of the Thames in central London is lower than in the east or south west. The regeneration of areas such as Victoria and the development led growth around Nine Elms and South Bank (including Battersea Power Station, Riverwalk and the Shell Centre) will change this, and these emerging river submarkets will extend the boundaries of prime. The proportion of international buyers increases towards the centre of London. Emerging new developments in particular, many of which have been marketed abroad have a high proportion of international buyers.

The largest group of buyers of second hand central London waterfront property in 2012/H1 2013 were investors, accounting for 53.8% of sales, in contrast to only 25.5% in wider PCL, partly a result of the higher yields that can be achieved on the river. Gross yields in PCL were an average 3.1% in September 2013, compared to up to 3.8% for central waterfront properties.

Despite cuts in the financial sector 57.9% of central waterfront tenants rent due to employment relocation. A further 36.8% are lifestyle relocators, demonstrating the strong appeal of the river and a large group who will pay premium rents for the right property. Only 10% of tenants in wider PCL have relocated for lifestyle reasons.

East London Waterfront

The waterfront market to the east of London is a complete mix of buyer and tenant types. Owner occupiers account for 50% of sales, drawn by the proximity of the City and Canary Wharf. Investors account for a further 39.3% of sales, drawn by strong average gross yields of 4.5% rising to up to 6% for the best waterfront developments. Tenants state a full variety of reasons for renting, from affordability to lifestyle choice.

The waterfront in east London has experienced significant gentrification compared to surrounding areas. However, on average, the waterfront in east London is the least expensive of the areas examined, making it a more affordable waterfront option for buyers and tenants alike.

* Properties bought through Savills from January 2013 to September 2013, between Putney and Vauxhall

Taken from
Spotlight: Waterfront London