Buyers eyeing Dalston, E8 may find house prices high

Move to this part of London and you’re likely to stay — especially now the Tube link is on its way

Prospective buyers eyeing Dalston in East London may think of E8 as “the next big thing” — central, cheap and, with the East London line extension due next year, a good long-term investment. But, as our East London special last week showed, sprawling Hackney is an unpredictable borough, with huge price rises in some parts, while areas near by lag behind. E8 — Dalston and London Fields — is so far one of the former, with prices up 18 per cent between October 2006 and October 2008, according to the Land Registry. So, is it too late to bag a bargain and are there further large price rises to come?

Where is popular?

Leading the way is a grid of tree-lined streets between London Fields to the east and Queensbridge Road to the west, including roads such as Albion Drive and Richmond Road. Here, a three-bedroom house with a garden is likely to cost upwards of £700,000 — less than in Islington, but not quite as cheap as Clapton, farther north, where pretty three-bed terraces can be found for £400,000.

Why now?

Anne Currell, head of Currell estate agency and an E8 resident, said that a mix of good schools, green spaces and lovely Victorian houses has made the area popular, but a limited number of homes has pushed prices up. Throw in the Tube link and Olympic works, cafés, shops and Broadway Market, and it is no wonder that “families who move here tend to stay”.

How badly have prices fallen?

In May, the annual average house price fall across Hackney was 23.4 per cent. But while prices in E1 (Shoreditch) fell 4.7 per cent in the past six months, according to Hometrack, they dropped just 2 per cent in neighbouring E8. Some agents say this is due to its proximity to the City, and also to prices that were less inflated than trendy E1.

Will bonuses boost demand?

Probably not. “The bankers still want to live in North and West London: it’s the lawyers and the doctors, the next pay bracket down, who want to live in E8,” Currell said.

And the new transport links?

Commentators disagree as to how much effect the overland extension of the East London line will have. Gary Patrick, sales director for Barratt East London, said that Barratt’s Dalston Square has already sold 166 of its 181 phase-one flats since its launch in March 2008, in anticipation of the new station. Currell expects to see further price rises, on top of any natural recovery, when the station is completed next year.

Isn’t Hackney dangerous?

The area has struggled to shake off its reputation as crime-ridden and grubby. Patrick said that most of the Dalston Square flats were sold to people already living locally, which suggests that buyers from elsewhere are yet to be persuaded.

Can you still make a pound or two?

For the first-time buyer or investor, Dalston is still a bit cheaper than some neighbouring areas. One-bedroom flats in period properties start at about £230,000, while Dalston Square has flats available for £280,000. Phase two, due to be launched next year, may have even cheaper properties. Queensbridge Quarter, a United House development bordering Richmond Road, has one-bedroom flats from £350,000.