From gentrification to the Aldi effect: what makes an area a hotspot?
by Housesimple on 4th April 2017
Buyers and sellers alike are always on the look out for signs of the next up-and-coming property hotspot. First came the ‘Waitrose Effect’, which saw the upmarket store help add nearly £40,000 to nearby house prices. This morphed into the ‘the Aldi Effect’ with the opening of discount stores across the country, adding around £5000 onto surrounding house values. Property must-haves are continually shifting, but what if you could spot the trends that indicate an area on the rise?
Commuters and young professionals always need reliable transport links. Looking further down a train line or at a fast bus or cycle route can be the key to clocking the next hotspot. The meteoric rise of Luton is testament to that. New developments like Crossrail also spark price rises in affected areas – just take a look at Tooting.
Similarly, spots with new leisure facilities, schools and stores can signal the evolution from suburb to hub-urb: a space with character and attractions all of its own.
If you want to get into these areas early, it’s wise to look out for unused spaces under development that might turn out to be the next foodie destination. Pop-up restaurants have jumped in popularity by as much as 82% in recent times according to an Eventbrite study and they need somewhere to set up. As do food trucks selling international street food. Even fancy farmers' markets have been known to drive up local house values by as much as 26%.
Areas ripe for development normally come with affordable prices attached – and this could make a huge different to your potential gains. Historically, many of the UK’s top hotspots were areas where prices had already hit rock bottom.
Up-and-coming spots normally already have regeneration plans in place and it’s during this next stage of gentrification that price rises can really kick in. The efforts in Ipswich to make it East Anglia’s Waterfront Town are an excellent example.
You'll often find regeneration plans reported in local papers or on council websites. Be on the lookout for signposts on building sites too.
What's in a name
'Neighbourhood branding' is another sign that an area is on the up. In recent years, house listings have had words like ‘Village’, ‘Meadows’ or ‘Riverside’ added to an area name to conjure up images of idyllic countryside living, even in the middle of the city.
Track local listings for events like food fairs, craft markets and festivals – anything that suggests the existence of a local creative community. The more there is going on, the greater the interest you'll receive when the time comes to sell up.
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