WHAT’S NEXT FOR WAPPING?

Wapping has undergone a considerable transformation over the past four decades, having changed from a neglected former industrial zone into a fashionable residential location with a growing and increasingly affluent population and a lively social scene.

However, will it continue to attract people to live in the area going forward in the face of significant competition from other regeneration areas elsewhere across the capital? We examine below some of the key factors which will shape its future over the coming decade and beyond.

WHAT NEXT FOR WAPPING?

Regeneration of the derelict former docks began in the 1980s, with hundreds of redundant warehouses being restored and turned into elegant riverside lofts that retained much of their original character. The redevelopment has included the establishment of a wide choice of pubs, restaurants and cafes as well as leisure facilities, notably at Tobacco Dock, a large events and conferencing venue.

Transport connections have also improved with the arrival of the Docklands Light Railway at Shadwell Station, to complement the existing underground services at nearby Tower Hill station (District & Circle) and overground connections (East London Line) from Wapping Station. Connectivity will receive a further major boost when CrossRail services operate from a revamped Whitechapel Station, currently due to start from sometime in 2022.

The improvements in infrastructure and amenities in Wapping have created a vibrant atmosphere and attracted a relatively young and affluent demographic. The average age of residents is 34 compared to the London average of 36, and 63% are employed in well-paid managerial and professional positions.

The proximity to both the City and Canary Wharf has made Wapping particularly popular with younger financial services workers for some time and it is increasingly attracting workers from the tech sector who want to be close to the East London Tech City (aka Silicon Roundabout) in Shoreditch.

Around 40% of residents in Wapping are living in privately rented accommodation (well above the London average of 25%), which has made the area popular with buy-to-let investors.

However, the supply of homes has struggled to keep up with demand in recent years. Fewer than 1,000 new homes have been built in Wapping over the past decade during which time the population has risen by just over 3,000.

The London Dock development by developer St. George is the largest to date in Wapping and will go some way towards redressing the shortage of supply when it is finished by 2029. A total of 1,800 new homes will be built, of which 300 had been completed by March 2021, together with 210,000 sq.ft. of retail space and restaurants, 7.5 acres of landscaped areas and a secondary school for 1,200 pupils.

REGENERATION

PROPERTY DEMAND AND SUPPLY

Major residential developments Number of properties Year completed

London Dock 1800 (planned) 304 as at Mar 2021

21 Wapping Lane 379 2014

Sovereign Court 124 (rental properties) 2017

Wapping Riverside 51 2017

R E S I D E N T I A L P R O P E R T Y P R I C E S

O U T L O O K

Although average sale prices have fallen over the past 12 months, they have risen by 11% over the past five years, which is slightly ahead of the 10.5% increase for the Borough of Tower Hamlets as a whole. Five-year price growth for Wapping flats has been stronger at 15% compared to the Tower Hamlets average of 10%.

Rents have also fallen over the past year but have averaged 14% growth over the past five years, driven largely by the younger City professionals and tech sector workers.

On the face of it, the short to medium term outlook is bright. Over the next decade, Wapping’s population is forecast to rise by 14% compared to the London average growth rate of 8.6%. The Tower Hamlets local plan intends to facilitate further improvements to local amenities and encourage new housing development to cater for the projected population growth.

However, the future success of Wapping is heavily dependent upon the economic prospects of the financial services and tech sectors in and around the City and Canary Wharf which have been the major drivers of housing demand and price growth in recent years. While financial services may lose some staff to Brexit, it is likely to remain an important source of buyers and tenants for many years to come. Moreover, the East London Tech City has grown rapidly since 2008 to become the third largest tech centre for start-up companies in the world and continues to expand.

Nonetheless, the experience of lockdown has shown that there is likely to be an increase in homeworking and the tech sector, in particular, has so far shown itself willing to offer staff the opportunity to take advantage of permanent flexible working going forward. Of course, this might mean that staff will work from home in Wapping, but could equally result in people choosing to live in other parts of the capital which offer better value for money.

Assuming that the economy recovers as quickly as the Bank of England has recently suggested and that housing demand continues to outpace supply, property prices should see steady growth over the next five years. The number of properties available to rent has reduced this year and expected future tenant demand should begin to drive rents up again next year and over the following few years.

Wapping property price growth forecasts

2021 2022 2023 2024 2025

Sale prices 5% 4% 3% 3% 3%

Rental prices -5% 2% 3% 2% 2%

The contents of this document are intended for the purpose of general information and should not be relied upon as the basis for decision taking on the part of the reader. Although every effort has been made to ensure the accuracy of the information contained within this report at the time of writing, no liability is accepted by Chesterton Global for any loss or damage resulting from its use. Reproduction of this report in whole or in part is not permitted without the prior written approval of Chesterton Global. June 2021.

C O N T A C TResidential sales: Alex Hensley+44 (0) 20 7182 1443 alex.hensley@chestertons.com

ResearchNicholas Barnes+44 (0) 20 3040 8406nicholas.barnes@chestertons.com

Residential lettings: Katharine Reynolds+44 (0) 20 3040 8323katharine.reynolds@chestertons.com

Sources: *Land Registry | Chestertons Research

O U R S E R V I C E S

Chestertons provides a range of services to homeowners, landlords and investors. With more than 30 offices across London, Chestertons has one of the largest networks in the capital, as well as a strong international presence.

Our services include: – Sales: We will manage the entire sales process, from giving an accurate

and realistic valuation of the property, through to advising on the most effective marketing strategy and managing the legal process once an offer has been accepted.

– Lettings: Our highly qualified teams ensure we find the best quality tenants and achieve the best possible rents and terms, protecting landlords’ investment and their tenants’ well-being through our professional customer service and stringent compliance processes.

– Property management: We offer a full suite of services ranging from securing tenants and rent collection, through to full management of individual properties and portfolios.

– Leasehold services: We specialise in helping clients with the valuation and negotiation process involved in lease extensions, freehold purchases and collective enfranchisement.

– Mortgage finance: We specialise in arranging finance for properties at the mid to top end of the market through our partner Springtide Capital.