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SUTTON: FINDING POCKETS OF VALUE IN OUTER LONDON

14 January 2015

IP Global’s latest analysis highlights the outstanding value offered by Sutton, compared with other suburban commuter towns within a 30 minute commute of Central London.

SUTTON MARKET UPDATE 

Identified as one of London’s ten key metropolitan areas in the London Plan and conveniently situated within easy commuting distance of Central London, Sutton is a town primed for investment, growth and strong returns. 

The performance of the London property market in recent years has provided significant returns for many property investors, with stable and consistent capital appreciation and yield delivery contributing to the city’s status as a global investment safe haven.

However, the high demand for city centre housing has seen prices rise beyond the reach of an enormous demographic of homebuyers and renters, urging them to seek out better value accommodation in the Zone 4/5 suburbs.

This spread of demand and price growth emanating from London’s high-priced central areas has become known as the London ripple effect, and has led investors pursuing higher yields and lower entry points to the market to consider other areas.

In 2014, IP Global launched developments in Ilford and West Drayton, as well as Lewisham, Greenwich and Bromley in the Southeast Quarter, all of which are already seeing the effects of this trend and offer a strong investment case over the medium term.

Our latest research efforts to unearth pockets of value in Outer London have brought our search to the south of the city again, this time to the town of Sutton. 

Sutton affordability map _block C.JPG

Already a popular residential area, Sutton also retains a combination of the all principal factors that entice both London residents and investors away from the centre of the city.

A SIMPLE CENTRAL LONDON COMMUTE

Areas providing a direct 30-minute commute into one of the Central London transport hubs of Victoria, London Bridge, Liverpool Street or King’s Cross are increasingly in-demand with renters and homebuyers alike.

Sutton has up to 14 trains an hour that connect the town with a number of key London transport and employment hubs. This level of connectivity is likely to attract many of the 55,286 Sutton residents who commute to areas outside of the borough for work.

COMPETITIVE PRICE PER SQUARE FOOT

With the UK house price-to-earnings ratio standing at 5.02, the most unaffordable level seen since the GFC, affordability remains a primary consideration when selecting a property. In the Knight Frank Tenant Survey 2014, nearly two-thirds of respondents said this was their main concern compared with the location of a property.

At GBP449 per square feet, Sutton offers excellent value compared with other Outer London towns within a 30 minute commute from the city centre. Properties located in nearby towns, such as Mitcham (Belgrave Walk) and New Malden frequently exceed GBP500 per square feet, with properties across the river in Twickenham reaching almost GBP800 per square feet.

VARIED LIFESTYLE AND AMENITIES

A less tangible indicator of Outer London potential is the general lifestyle and level of amenities an area has to offer new residents. The majority of those moving to Outer London will be reluctant to give up the conveniences and ambience of modern living to which Central London life has made them accustomed. This means areas that are undergoing significant regeneration work are particularly popular with this demographic.

Sutton is the subject of significant regeneration investment, with plans in place to improve existing rail links and to connect the town to the Tramlink that serves much of South London. Other improvements include additional commercial, retail and cultural space for the town centre, as well as the development of community spaces such as additional public squares and a new theatre/arts complex.

QUALITY EDUCATION OPTIONS

Another more tangible factor in defining areas of demand in Outer London is the educational opportunities on offer. In the UK schools are rated by OFSTED and properties that fall within catchment areas for highly rated schools typically attract higher demand and prices. 

Renowned for its high-achieving schools, the London Borough of Sutton is one of the top performing education authorities in England, with 93% of primary schools and 88% of secondary schools rated as ‘Good’ or ‘Excellent’ by OFSTED.

In addition, the best of London’s higher education institutions, such as University College London and the London School of Economics and Business Studies, are located just a short journey from London Victoria, placing them within an easy commuting distance of Sutton.

SUTTON: YOUR NEXT INVESTMENT DESTINATION?

With all this, it is little wonder that Sutton is the location of our latest development. If you’re interested in unlocking the potential of this exciting new market, please register your details with us or speak with your IP Global Consultant. 

 
IP Global

Written by IP Global

IP Global’s full-service approach is built on extensive market research and analysis combined with a significant financial commitment to every investment we offer. We are able to manage the entire investment process end-to-end, from sourcing, financing, and management to those all important exit strategies, making investment in real estate as straightforward as investing in more traditional asset classes. Our expertise, experience and strong record have produced over USD2.8 billion in international real estate investments in over 30 markets worldwide.

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