How to buy a house that will make you a millionaire

Homeowners can make millions on houses that go up in value – but how can you spot the up and coming areas first?

How can you spot the up and coming neighbourhoods before everyone else?

Sitting on a pot full of money is every homeowner’s dream. If you could buy a house in an undiscovered area that then became a chicest neighbourhood in town, you could potentially make millions of pounds from one savvy deal. But as a Property Rich List finds that more than 10,000 streets in Britain now have an average property price of more than £1m, how do you scoop up such a smart buy – before everyone else gets in first?

Stephen Ludlow, chairman of estate agent Ludlow Thompson, says that there are a few early signs that show which areas will take off. Here are his tips on how to find the up and coming areas before everyone else...

Follow the supermarkets

Major supermarkets have entire departments dedicated to market research, and so they have in-depth research data on the demographics of each area. As soon as a neighbourhood looks as though it’s on the up, expect a supermarket to swoop in. Sainsbury’s, Tesco, Waitrose and Marks & Spencer are the big four to look out for in increasingly wealthy areas, and as Ludlow says, “Morrisons are into that market now”.

Coffee shops are also a good indicator – “they would have done a lot of marketing profile about the type of person living in that area,” says Ludlow - and where there’s a Starbucks or Costa, other retailers will follow. Smaller retail chains often look to major coffee shops as a sign of where to branch out next, as shops with a similar footfall will simply copy the locations of bigger brands.

Travel, Travel, Travel

If you can’t get the ideal location, then you at least need somewhere in commuting distance of the ideal location. Any kind of major travel plan – including Crossrail, overground trains and even bike pathways – can massively affect the make up of an area. Ludlow says Finsbury Park is an example of a neighbourhood that saw a major profile change after the station infrastructure was improved – “that gives a lift that spirals out into the residential house prices”, he says.


And pay close attention to bike pathways or hire schemes, as these are now far more important than they were even a few years ago. “Now when we’re talking to landlords we make sure there’s provision for cycle storage - either a bike rack in a communal area or permission for bikes to be mounted on a wall,” adds Ludlow.

The spread of gentrification: how to be close to cool

Once one area becomes popular, expect the nearby neighbourhoods to pick up their house prices. “You get one area at the core where people want to live originally, but then that ripples and expands,” says Ludlow. So don’t bother trying to buy in the latest cool neighbourhood, but look next door instead – the market is sure to follow.
In London, Ludlow says that Vauxhall is a key example of a core neighbourhood – the rise in property prices then spread to Oval, Camberwell, Dulwich, Peckham and right across south east London.

Big developments = big money

When a developer plans a major complex, they’re legally obliged to pay a local development contribution, which tends to lift the local area. The Olympic Park was the textbook example of such a renovation, though other big sporting complexes such as Wembley also led to plenty of new housing builds.
But it doesn’t just have to be sport - “where the American Embassy being built in Vauxhall, no doubt there’s a lot of secondary capital development going in there on the back of that development,” says Ludlow.
Meanwhile in King’s Cross an initiative to improve the train station boosted the area, and Google’s decision to buy offices nearby will bring in plenty of well-paid staff. Even if an area is fairly desolate, a major development complex can bring the funds to turn around a neighbourhood entirely – which is good news for any homeowners who manage to buy before the yuppies arrive.


Source: the telegraph