According to seasoned property investors, there is no better sign that you
have bought in the right place than the opening of the first cappuccino bar
in an otherwise rundown inner-city area. Thousands of Londoners who were
fortunate enough to buy in Islington in the 1970s, Clapham in the 1980s or
Hoxton in the 1990s will know what they mean: when high-earning,
middle-class professionals decide to colonise a downtrodden suburb, renovate
the houses and spend their money in the local shops, the rise in house
prices can be phenomenal.
Take the case of Commander Edward Broke Evans. When he and his wife, Elaine,
bought a 78-year lease on a five-bedroom flat on Prince of Wales Drive in
Battersea, southwest London, for £12,000 in 1971, there were few signs that
the area would one day achieve the status it has now. “It was dimly lit and
there was a lot of mugging,” Broke Evans recalls. “There were no restaurants
to speak of, just a few snack bars. You had to go elsewhere for a decent
meal. As for shops, there was a corner-shop culture. The communal areas of
the flats were covered with linoleum, and the flats themselves were held on
short leases and were occupied by families.” Then, in the 1980s, young City
bankers began to move into what jokingly became known as South Chelsea. Now,
the joke is on those who sneered at the idea of Battersea being a smart
address. Broke Evans, who was widowed three years ago, is downsizing to a
smaller flat in the area and has put his home on the market with John D Wood
for £925,000.
Cappuccino bars, of course, are two a penny these days in Battersea and other
areas of Britain that have undergone extensive gentrication. So, too, are
all those other obvious indicators that an area has moved up in the world:
the bijou restaurants or posh estate agents on the high street, the Waitrose
or Fresh & Wild where there was once a Costcutter or Lidl, and, of
course, rows of skips filled with debris from the kitchen or loft extensions
or freshly dug basements.
By the same token, if most of the houses in your street are still let to
students, lots of windows are boarded up, or worst of all, the pavements are
peppered with yellow police boards appealing for witnesses to the latest
serious crime, then you know your area unfortunately still has some way to
go.
So what is a buyer to do? It is all a matter of timing, of course. Buy too
early and you will be in for a long wait; wait until the place has “up and
come” and you will be kicking yourself. So follow the example of all those
coffee-shop chains — and the other kind of businesses that can transform the
look of a high street almost overnight. They don’t just open new branches in
the middle of poor suburbs in the hope middle-class homeowners will flock to
them; instead they minimise their risks by first undertaking extensive
market research. This means, above all, studying the demographic trends and
determining the kind of consumers moving in.
One of the main marketing tools used by the retail industry for this purpose
is the Mosaic system, devised by Experian, a data research and credit
reference firm. The system analyses our spending habits — using data from
credit cards, supermarket loyalty cards and many other sources — and
classifies each of us into one of 61 different socio-economic groups. You
might, for example, be anything from a Corporate Chieftain to a Bedsit
Beneficiary.
By identifying movements in these socio-economic groups, Mosaic can be used to
pick out areas that have entered the early stages of gentrification, before
house prices begin to rise appreciably. In research exclusively for The
Sunday Times, Experian has conducted a similar appraisal. They have selected
six postcode sectors undergoing demographic trends likely to trigger a sharp
uplift in prices similar to that witnessed in Battersea in the 1980s, or in
Balham, south London, over the past 10 years.
Interestingly, none of the six are in London: a measure, perhaps, of how few
areas in the capital are still left to be “gentrified” — or, perhaps, quite
how expensive even the ungentrified ones have already become. Most of the
likely candidates are instead in the north, where there are still pockets of
towns with low house prices but a stock of good-quality housing of appeal to
aspirant middle-class homeowners.
One of them is Thornaby-on-Tees, a small town just to the south of
Stockton-on-Tees. There is no point in looking for a cappuccino bar in
Thornaby just yet. You might have to settle instead for a cuppa in the cafe
at Asda, or visit to the town’s two most notable culinary establishments:
McDonald’s and KFC. Most of the unlovely brick and concrete 1960s shopping
centre lies boarded up, ready for redevelopment.
At first — and perhaps also second — glance, Thornaby is not an obviously
attractive place to buy a home: the skyline is dominated by two large 1960s
tower blocks. Yet between the utilitarian sprawl of a 1960s overspill
settlement lie some streets of Victorian terraces and 1930s semis, and a
pleasant green that survives from Thornaby’s days as a village.
Much of the town is blue-collar, but Shelley Taylor, 28, a gymnastics
instructor, perhaps embodies better times to come. Brought up in one of the
more expensive suburbs of Middlesbrough, she bought her first home seven
months ago, a three-bedroom 1930s semi set in large gardens in quietly
suburban Balmoral Avenue, for £96,000.
With the aid of her father’s DIY skills, Taylor has spent £13,500 renovating
the property. It has been rewired, replumbed, and given a new kitchen and
bathroom. Now she is selling up and has put the house on the market for
£134,500.
“I chose Thornaby because I could afford it, with a view, specifically, to
doing up the house and making some money,” she says. “It is cheap to buy
here, but everyone’s friendly and it is very convenient. There is a
fantastic pub just round the corner. I am not so sure there is much sport
going on, but there is a nice golf course just down the road, and two new
housing estates have been built close by.”
While to the outside eye Thornaby may have some way to go before it could be
considered a good address, it is the presence of relatively well-off
incomers such as Taylor that has excited the data-crunchers at Experian. The
Mosaic system has detected a sudden influx of members of the socio-economic
groups they call City Adventurers and South Asian Industry — those who are
typically found to move into an area in the early stages of gentrification.
City Adventurers are categorised as “twentysomethings on high salaries in
high-pressure jobs” who “work long and irregular hours”; South Asian
Industry as economic migrants who are “optimistic in nature”, who “look to
the future”, have an “entrepreneurial bent” and “are prepared to take risks”.
True, as yet, they are still outnumbered in Thornaby by socio-economic groups
associated with poverty and decay, such as Bedsit Beneficiaries, Dignified
Dependency and Upper-Floor Families, but the crucial thing is that the
demographics are changing in the right direction. Prices will also be rising
from a low base: average house prices in the TS17 6 postcode sector, which
the Land Registry puts at £99,697, are not only cheap by national standards
(the average for England and Wales is £173,717) but also cheap by the
standards of the northeast (with an average price of £124,265).
Some of the other neighbourhoods identified by Experian as being in the early
stages of gentrification will raise eyebrows. One of them is BS2 8, an area
of Bristol that covers St Pauls, long associated with the riots of 1980 and
1981, and for simmering racial tensions long after that. Now, however,
Experian has detected the area is being colonised by a socio-economic group
known as Just Moving In — characterised by “optimistic, bright young things”
who work hard, are novelty-seekers and for whom “being seen to be doing well
is a high priority”.
Another of the areas picked out by Experian is postcode sector M11 2, covering
the western part of Openshaw, east Manchester. At present, the area is known
for its boarded-up houses and disused factories. But even before it was
announced that Britain’s first super-casino is to be built close by,
Experian had noticed a shift in the population, with a significant influx of
the Just Moving In group — attracted by the area’s proximity to the city
centre.
Openshaw is not the only part of Manchester tipped for gentrification.
Experian has also picked out Ashley Lane, to the northeast of the city
centre. The reasons given by Experian, however, do contain a hint that
investing in up-and-coming residential areas is not a one-way bet: come a
downturn and it can all go wrong, as it did in large parts of London’s
Docklands in the aftermath of the 1980s boom.
The socio-economic type colonising Ashley Lane is called Burdened Optimists.
They are defined as “confident but not-very-well-educated cohabiting and
married couples who live in mortgaged properties in areas of good
employment”. They are, however, “almost reckless in their optimism”, they
have borrowed so much that they “cannot keep their properties in a good
state of repair”. In other words, they face losing everything if the
property market goes belly-up.
- Shelley Taylor’s house is on sale with Snail Homes, 0845 608 1707, www.snail-homes.com
Areas on the up
- TS17 6 Thornaby, Stockton-on-Tees Sometime village which fell
victim to 1960s overspill development. Good transport links and a reasonable
stock of inter-war houses
- BS2 8 Kingsdown/St Pauls, Bristol Until recently synonymous with
decay and racial tension, but now enjoying a revival thanks to its proximity
to the city centre. It also has some attractive Victorian housing
- BD7 3 Great Horton, Bradford Middle-class suburb on the west of the
city. Solid Victorian terraces give way to semis and detached villas as you
climb towards the moors
- HD1 3 Lockwood, Huddersfield Former spa just southwest of the town
centre, with mixed population and good sturdy housing
- M11 2 Openshaw, Manchester Rundown industrial suburb of east
Manchester, with some houses boarded up. Its location near the centre means
the only way is up
- M9 4 Ashley Lane, Manchester Close-knit part of Moston, northeast
of the city centre. Home to one of the campuses of Manchester College of
Arts and Technology
Buyers moving in
The socio-economic types who drive up prices in rundown urban neighbourhoods:
- Burdened Optimists Confident but not-very-well-educated cohabiting
and married couples who live in mortgaged properties in areas of good
employment. Confident, almost reckless in their optimism, they live for
today, and are into indulgence and immediate gratification. They have
conservative tastes in food, are heavy users of internet and SkyTV and pay
lip-service to health and fitness.
- South Asian Industry Economic migrants from the subcontinent who are
optimistic in their outlook and plan for the future. They are prepared to
take risks and to initiate change. Active, extrovert and ambitious, they
often have an entrepreneurial bent.
- City Adventurers Twentysomethings on extremely high salaries
employed in high-pressure jobs. They work long and irregular hours, and
usually live in one- or two-bedroom flats. Many have partners, though they
regard relationships as ornamental rather than long-term.
- New Urban Colonists Well-qualified singles and childless couples,
many working in consultancy, marketing and the media, mostly in London. They
take numerous foreign holidays and keep fit.
- Just Moving In Postmodern consumers who live in new properties built
in urban centres since 2001. They place a premium on modern design and
technology. This type spends a lot of money furnishing their homes, and on
organic food and hair and beauty treatments. They are willing to work hard,
but are unlikely to start their own businesses.
