With tax relief reductions forthcoming, the emphasis has shifted from income to capital for many landlords. In London, there are still plenty of options for those looking for decent capital returns despite steep house price rises in some areas.
One of the areas under the investor spotlight is Clapton, where values have risen more than £40,000 in the past year alone. Following the likes of Brixton in South West London and Dalston in east London that have both undergone huge transformations during the past decade, could this be the latest area in the capital to undergo the process of gentrification and see prices soar even further?
Clapton is in the east London borough of Hackney and is divided into two parts – lower and upper Clapton.
Its reputation for drug and gun crimes during the 1990s and 2000s meant it gained the unfortunate nickname of ‘Murder Mile’ – something that was highlighted in an episode of Channel’s 4’s TV show Brass Eye in 1997, which suggested the petrol station was shoplifted every 30 minutes.
Today, it is one of the few areas of London that retains a sense of diversity, bucking the trend for the middle-classes to sweep in and transform the main shopping areas into clone high streets full of chain stores.
However, the smart money is beginning to move in and there are plenty of Victorian homes and ex-council houses attracting property investors. Part of the reason is the relatively attractive yields on offer. Average rents in Clapton are more than £1,451 a month, according to Rentify. Properties typically take three weeks to rent and offer rental yields of 4.14 per cent. This is significantly higher than in other areas of London, such as Kensington & Chelsea where average yields are 1.88 per cent and Richmond Upon Thames where average yields are 2.79 per cent.
Areas of Clapton
One of the most attractive aspects of Upper Clapton is Springfield Park, which includes a Grade II listed house with a café. The park also includes five tennis courts, a cricket pitch and rugby fields. Meanwhile, in Lower Clapton, there is also plenty of accessible green space, including Millfields Park and Clapton Park. It is a multicultural area, with the shops and restaurants on Chatsworth Road reflecting its diversity, offering African, Asian and Caribbean produce. More recent additions include coffee shops and a French delicatessen. It is this area’s thriving Sunday market that many investors believe is doing for Clapton what Broadway did for Dalston.
Transport in Clapton
Clapton is not on the tube, but good transport links are provided via the London Overground station, which is on Upper Clapton Road. It means it is possible to be in Walthamstow in seven minutes, Hackney Central in 10 minutes and Liverpool Street in 12 minutes. And in turn, these links mean it is possible to get into the main shopping hub of London at Oxford Street via Bond street tube station in a touch over half an hour.
Photo: Hackney London September 29 2015 119 Clapton Pond by David Holt