We’ve all heard the old adage that if you want to find the next up-and-coming neighbourhood then follow the artists. But data scientists have recently fine-tuned this method, deciding the best way to pinpoint the next boom area is to look for the artists’ coffee supply…
The scientists created a heat map of London where they identified areas with a high density of artisan coffee shops, a low density of chicken shops, plus properties selling for under £500,000. This combination successfully alerted them to the next property hot spots in London. Here we look at the impact of coffee shops on real estate prices along with a few other ways to predict the fortunes of urban areas.
Coffee
In fact this method isn’t completely new. Coffee has long been a factor in locating the next boom area, and a caffeine injection in a down-at-heel neighbourhood can be an early indicator of a changing demographic. Flourishing independent coffee shops show that there has been a recent influx of people with a high level of disposable income. However, if the area is home to some of the larger coffee chains that may mean it’s already reached its peak.
Large coffee chains invest a lot of time and effort calculating where to open new stores, and are more likely to have a strong presence in an area that has reached its growth potential.
Restaurants and delis
Similarly, popular one-off restaurants, niche food suppliers, bakeries and delis are also a sign that the locals have a bit of money in their pocket and want to spend it where they live. A high disposable income often comes from young professionals who don’t yet have families, which leads us to…
Young people
Do a bit of people watching and who do you see? The traditional up-and-coming area will be full of locals in their late twenties and early thirties. They are young professionals with little capital but lots of style and earning potential. They want to be close to decent shops and good transport links. Usually once they move in small businesses, such as clothes and lifestyle shops follow soon after. Typically places with a high density of this demographic will experience a growth in house prices in a relatively short space of time.
Renovation and beautification
Despite young people often actively seeking out a bit of urban grit (hence the rise in popularity of Peckham), once they are in an area they want to change it. Graffiti starts disappearing, or is replaced by more tasteful street art. New home owners will gut old fashioned houses to fit with their modern way of living. It may be obvious, but keep an eye out for rubble-filled skips, as dividing walls get demolished and removed and people convert to a more open plan style of life.
Look out for renovations on a larger scale too. If a council is cleaning up a large area, like the waterfront or a brownfield site, the chances are private money will follow. This kind of regeneration gives people faith in an area – if the council is investing heavily, then they are unlikely to allow an area to degenerate.
Better transport links
This is perhaps the most obvious tip, but also the most transformatory. You are living the investor’s dream if you have a little property on the outskirts somewhere, and a new rail link gets planned a couple of streets away. Sadly this doesn’t often happen. However, keeping your ear to the ground and finding out where transport improvements are going to happen is a good way to find out which neighbourhoods are on the up. Alternatively, if there are no developments afoot, take a look at the areas that are really peaking. Is there somewhere nearby, connected by good transport links that will benefit from the boom? The positive effects of Notting Hill are still being felt through West London all the way to Acton.