Despite predictions of a sluggish market in the capital in 2008, the boroughs of Hackney and Tower Hamlets in East London are two of the few places that look set to see growth over the next 12 months. In a recent report, Halifax has flagged "Olympic fever" and improved rail links as two factors in achieving these high-performing house prices.
The East London Line extension, which is due to open in 2010, will create attractive commuter links in and out of the city, widening the area's appeal with City workers and families. Meanwhile, the great expectations around the transformation of swathes of industrial wasteland into the 2012 Olympics venue looks set to keep buyers keen this year. Beyond the frenzy of the Games, Hackney and Tower Hamlets will be left in peace to enjoy the newly created green spaces of the Olympic site, a marked improvement on the scrappy no-go area along the eastern edge of these boroughs.
The more gentrified areas of Victoria Park, London Fields and Bow are well-established, but savvy buyers are looking further north, and deeper into the E5 postcode, in and around Clapton, according to Kamal Ali, of the local agency Keaton's. Lower Clapton and Homerton are his hot tips for getting more for your money: "We've typically sold properties in E5 to creatives, writers, artists and so on, but the close proximity of the City and the establishing of two new Academy schools nearby mean we're starting to see a wider range of interested buyers."
Hackney and Tower Hamlets have always been pick'*'mix areas, with affluent pockets rubbing shoulders with some of the UK's poorest areas, but the huge investment pouring into this vibrant part of London can only be good news for its residents over the coming 12 months.
Compared with its over-heated southern cousins in The Weald and on the Sussex borders, 2008 could be the year that North Kent comes into its own.
The Medway towns have always lacked the beauty of other parts of Kent and have developed a reputation for being London overspill areas that struggle to achieve impressive asking prices. But the likes of Chatham and Dartford should reap the benefits of improved commuter links and below-average house prices in the year to come.
North Kent has experienced huge regional investment and buyer-interest around Ebbsfleet International railway station, which now provides a 15-minute journey into St Pancras International in London. Prices have been rocketing, but there are still bargains to be had. "Chatham, especially, is still cheap," says David Mansfield, sales manager at Bairstow Eves in Rochester. "Victorian terraces here are very sought-after and often retain their period details, but typically sell for £35,000 to £40,000 less than nearby towns, such as Rochester. Your cash certainly buys you more."
Chatham will get its high-speed London commuter link next year, making this area even more attractive to investors and City workers. When combined with easy access to Bluewater shopping centre; good education prospects, including Kent grammar schools; the development of the historic dockyard at Chatham; a strong rental market, and the link between investment and infrastructure translates into a buouyant market even when times elsewhere are looking lean.
Several areas in Wales have attracted the pundits' interest for 2008 – with some of the lowest property prices in the UK, it seems that the only way is up. Monmouthshire may have the edge this year, as second-home buyers are forced to look beyond the expensive Cotswolds for their dream bolthole.
The Halifax singles out Newport and Pontypool as this year's main Welsh draws. Martin Ellis, its chief economist, is confident that they will see some of the growth levels Somerset and Devon have been used to in recent years.
"Second-home owners are looking over the border from the Cotswolds and seeing nice countryside. Pontypool is close to the Brecon Beacons and has a rural appeal, whereas towns like Newport are experiencing a ripple-effect from Cardiff, with commuters realising that they can afford more. These areas will outperform the rest of the market in 2008."
The area also offers good accessibility, with the nearby M4 connecting into the West Country and the Midlands. Despite the doldrums of several decades of industrial decline, the charms of rural Wales might translate into returns for adventurous investors in 2008.
North of the border, the strong housing market of the past year looks set to continue for another 12 months, with Edinburgh, Glasgow and Aberdeen – the latter fuelled by the booming demand for oil – leading the charge. The towns of Lochgelly, Paisley and Greenock are all well-placed for a rise in 2008, having lower than average house prices and good transport links to both Edinburgh and Glasgow.
Students are attracted to Scotland by the free tuition – good news for buy-to-let investors in particular – while the perception that Scotland is enjoying a better standard of living than the rest of the UK has started to be reflected in the figures.
Martin Gahbauer, senior economist at Nationwide, predicts that Scotland will be a safe bet in 2008. "Scotland is bucking the trend, with prices still rising at a rate of 10 per cent a year. We expect this to slow down to around 4 per cent, but this is against the rest of the UK remaining flat. We're optimistic about this," enthuses Gahbauer, "as affordability has not deteriorated here. Scotland has enjoyed fewer boom cycles than the rest of the country, and this steadier growth will continue to benefit prices over the next year."
Scotland's cities are set to remain as sought-after as ever. Glasgow has distinctive architecture and a cosmopolitan vibe; Aberdeen has a strong oil-based economy; and Edinburgh's healthy mix of commerce and culture continue to make it one of the UK's most desirable places to live. But their price tags are forcing bargain hunters to seek out overspill regions and this ever-widening spread across the region is bolstering an already bullish market.
The property market in central Liverpool has always been tricky, as buyers have favoured the commuter districts and surrounding countryside to splash their cash. But this year, there's reason for the city's buy-to-let investors and first-time buyers to feel positive.
The Halifax points to the fact that investment increased substantially in the run-up to the city's year as European Capital of Culture. If this sounds unlikely, look as Glasgow's fate back in 1990, when it won the same accolade. Back then, the tourism boom saw an upturn in theatre, museum and gallery visitors by 40 per cent and it became the UK's third most popular tourist destination.
Property-wise, the nationwide market was flat in 1990, but, once the doldrums had passed, Glasgow made the most of its reputation as a vibrant city for several years, and its prices rose considerably.
So what can this mean now for Liverpool? The city's central locations and dock areas haven't completely overcome the blight of social deprivation, and the recent buy-to-let frenzy has produced a potential over-development and glut of mid- to high-priced apartments. But many pundits think that the new interest in the city will outweigh these issues towards the bottom rungs of the market.
John Kildare, a valuer at City Residential in Liverpool, has noticed a recent return of a rare entity. "We've seen a lot more first-time buyers through the door since Christmas, maybe as a result of the recent drop in interest rates, and while the higher end is struggling in Liverpool, off-plan sales are still strong. Our cultural status has placed Liverpool in the spotlight," he continues, "and the investment money has been well-spent on improving our poorer areas. This regeneration will see Liverpool become a big relocation centre over the next few years."
Liverpool's enduring civic pride, improving infrastructure – including a huge new waterfront conference centre – and busy regional airport are piggy-backing on their European Capital of Culture badge in a bid to reverse the trends elsewhere in the country. Together, it is hoped that will ensure this year is not just about the arts, but long-term growth as well.Reuse content