Property: London's going to the docks: Confidence is returning to Docklands and bargain homes are being snapped up there, says Anne Spackman
Saturday 15 January 1994
The residential image of Docklands is based on the stylish warehouse conversions on the fringes of the City of London, at Wapping, Limehouse and Butler's Wharf. But the area which comes under the 'Docklands' banner runs seven miles down both banks of the river, and is the size of a small town. Like all towns, it has its richer and poorer neighbourhoods.
As you move further east, you see that Docklands offers the kind of suburban, condominium housing never before found in London. Owner-occupation levels in the area have gone up from 2 per cent to 52 per cent in the past 10 years. Of the new owners, half are locals from the boroughs of Tower Hamlets, Southwark and Newham.
The cheaper parts of Docklands provide well-equipped, modern homes with good security and car parking - at almost unbelievably low prices.
Barratt has been selling three-bedroom, two-bathroom houses with garages, in its award-winning Sovereign View development right on the river at Rotherhithe, for around pounds 130,000. Not surprisingly, it has a waiting list for the next phase of its development, to be completed in July.
This weekend, Galliard Homes opens its new Tideway development about a mile away from Sovereign View. Prices start at pounds 39,950. Two-bedroom flats with underground parking cost from pounds 55,000. These are some of the lowest prices anywhere within the M25.
In spring this year Galliard is to sell phase one of Burrell's Wharf, one of the most attractive buildings on the Isle of Dogs. The people next door paid pounds 125,000 for their two-bedroom flats facing the river and the City. That was in 1988; the same kind of flat in Burrell's Wharf costs pounds 87,000, and the price includes membership of the development's leisure club.
The reason these companies can sell for rock-bottom prices is that they had the nerve to buy at rock-bottom prices - often from the receivers. Barratt is the only one of the four original Docklands companies still in business.
But confidence is flowing back into the area. Barratt had to compete with Ideal Homes for the Pageant Wharf site, next to Sovereign View. Land battles will inevitably mean higher costs. How long can the appeal of the area be price-led?
Roy Conway of Galliard Homes, which was very successful in Docklands in 1993, thinks prices will stay competitive for a few years yet. 'We're not saints. We like to get in and get out. We will only buy where we feel we can sell at good prices.
'I don't see that in the next year or so people will want to pay pounds 300,000 for a flat here. When the Jubilee Line arrives, and Canary Wharf fills up, the big business will come back. But it will never be the rich person's place they imagined.'
'When' is the crucial word on the Isle of Dogs. It used to be 'if'. If the Jubilee Line came, if Canary Wharf came out of administration - then the future would be good.
Last year the believers saw their faith rewarded. The Jubilee Line is coming by the end of 1998, establishing Canary Wharf a few stops down the line from Westminster and Green Park. The development was rescued, and Mirror Group Newspapers and London Underground announced they would relocate there. From a glut of 1,500 unsold new homes, Docklands now has fewer than 100 on its books. Prices have started to twitch upwards.
But important bits of infrastructure are still lacking. A Marks & Spencer store is needed to draw in other retailers. There is no cinema. There are few shops and restaurants. No new schools have been built to cater for the incoming population, and the nearest primary school to Canary Wharf has signs saying a security firm is charged with protecting the premises.
Without such amenities, it is hard to extend the appeal of Docklands to families. Of the 31 homes Barratt sold in the first phase of its Sovereign View development, only one has a child living it.
The London Docklands Development Corporation (LDDC) recognises that it must provide homes for the pioneers to trade up to. It is in negotiation with Berkeley Homes, the up-market builders, which wants to put town houses on National Wharf, a site with views of Tower Bridge. Barratt is also proposing a development of three- and four-bedroom family houses on the south bank.
Currently Docklands has three main types of resident. First, the young employed: some are wealthy professionals, others are clerical workers who moved to the area from Kent, Essex and Surrey. They have either bought property or are renting it (many to buy later). Some are single, some divorced, and they are filling up Docklands' first nightclub, which has opened at the Britannia Hotel on the Isle of Dogs.
Then there are the second-home buyers, normally older professional people who use their Docklands flat as a pied a terre. For up-market agents this is the largest group of customers. They buy in Narrow Street, Limehouse, or in Wapping High Street, where many of the smartest warehouse developments such as New Crane Wharf are to be found.
Third, there are the various investors: serious dealers seeking a 10 per cent return on their outlay, wealthy parents buying for children studying in London, foreign banks - Savills sold the courtyard block of Anchorage Point, the smartest address on the Isle of Dogs, to the Bank of China.
Despite all the good news, however, Docklands is still a good couple of years away from reaching its 'critical mass'. Office space on the Isle of Dogs is being rented out for as little as pounds 5 a square foot, but companies feel their staff would not be happy to move there. And of the agents singing Docklands' praises I found only one who lived there.
One off-putting factor is that this is still the East End. Though much of the local authority housing has been upgraded so well that you cannot separate it from the new-build, there remain acres of ugly council blocks and disused industrial land. If you live on the Isle of Dogs it is possible your local councillor will be a member of the British National Party.
Although the LDDC is trying to create green spaces, there is still no Regent's Park or Hampstead Heath. But there is the river, which improves the view and the air.
And for those with the money there is still the warehouse dream. Sarah Shelley of Knight Frank & Rutley has just done an archetypal Docklands deal. A banking couple moving to Hong Kong sold their three-bedroom warehouse penthouse in Wapping for pounds 380,000; the buyers were another banking couple from Battery Park, New York, via Hong Kong.
Just five or six years ago, Shad Thames, across the river from Wapping, was a ghost town, empty and unloved. Now it is Docklands' smartest quarter. Butler's Wharf, sold in desperation to a Scandinavian pension fund, is now full. Nearly all the flats are rented, so would-be buyers have little to choose from. Prices for a one-bedroom flat start at pounds 110,000.
Further down the river, the Jubilee Line may finally deliver Docklands' promise. The crucial decision for anyone thinking of moving there is whether to buy now and put up with a few years of builders' rubble - or to wait until the area is more settled, and more expensive.
(Photograph and map omitted)
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