John Elkington, our Chairman at Enness Private Clients and Group Chief Executive of The Penhurst Group, offers us his thoughts on the current property market, concentrating on South London. John joined Enness in an official capacity last year but has been with us from our founding moments as the Landlord of our first office building in Battersea. John is an expert in the property market, having founded The Penhurst Group in 1987 – a leading property group in London that owns over three hundred residential properties in South London. His role is divided between leading and developing both companies.
What would you say the prospects for 2014 in the London Property Market are?
“As part of our annual revaluation of the Penhurst portfolio I’ve spent a lot of time recently researching the statistics released by Nationwide and the Land Registry. There have been particularly strong returns in the past year from properties in Wandsworth, Hammersmith and Fulham. Prices in Battersea alone have increased by 20% during this time. Although these figures are enormously promising for property owners in South London, it’s clear to me that this pace cannot be maintained over a long period. I would estimate that over the next year property prices will continue to rise, yet at a slower rate – perhaps 8-9% over the next year is possible. So, all in all, it seems that 2014 will be a strong year, but not quite as strong as 2013”.
Is now a good time to invest?
“That really is the million dollar question. If taking a medium to long-term approach to investment there is no bad time to invest in London property as ultimately you are going to see growth. I started building up my property portfolio in the 90’s, and although there are always going to be peaks and troughs I could never have predicted the degree to which those investments would grow. So, I would strongly recommend setting out to make medium to long-term investments”.
Why would someone mortgage a property portfolio?
“The most obvious answer to me is that however much capital you have, mortgaging a property portfolio is strongly advisable as it will generate cash to look at other opportunities. Obviously there are exceptions as zero geared portfolios would suit some people, but generally the ability to generate capital is appealing”.
What would you say the key areas of London are to invest in?
“Obviously I’m slightly biased as 90% of The Penhurst Group’s portfolio is in South London. But at the same time one of the areas I would most recommend investing in is Battersea. What people have been talking about happening in Battersea for the last twenty years is finally happening. With the Indian and American embassies moving to Battersea, alongside the development of Battersea Power Station and plans for it to be connected to the Northern Line, I have to say that Battersea will see high levels of projected growth in the coming years”.
Other than that, I would suggest that Peckham and Streatham are Southern boroughs that are key places to invest. I’d also urge people to consider researching and investing in any areas in a five to six mile radius around the central areas”.