The Isle of Dogs may not be your idea of the most wonderful place to live in this green and pleasant land, being somewhat greyish and decidedly unpleasant for the most part. But smart homebuyers are looking seriously at the potential of dockland housing, and houses are being snapped up like hot cakes.
The reasons for this activity lie with the London Dockland Development Corporation, the quango set up by the Government to revitalise the decaying docklands of Wapping, Limehouse, Isle of Dogs, the Royal Docks and Surrey Docks south of the River.
Not only is the corporation tarting up the general environment, and providing access routes, communications, land reclamation services, and all the expensive stuff that has to be done before a private developer will look at a site; it is also taking a fairly high stake in the repopulation of the docklands area. Four thousand new homes have already been built, with about 2,000 a year due to be completed in the future. Additional developments on land which is not owned by the LDDC should provide for about 2,250 houses.
The LDDC itself does not actually build anything. But through its considerable powers and the amount of land it owns and is gradually feeding on to the market it can influence the style and price of developments in dockland.
The well publicised waterfront des. res. costing £300,000 or more has prompted howls of outrage from community pressure groups on both sides of the river. The bulk of docklands housing development tends to be of a more modest nature than the refurbished riverside properties at New Concordia Wharf or Barratt’s prestigious Gun Wharf development. But the criticism remains that the LDDC is providing a bonanza for young upwardly mobile professionals and precious little for anyone else.
Southwark council, for instance, is hostile to the whole concept of the LDDC: its powers, its money when London boroughs are losing theirs, its undemocratic nature, and the foisting of piecemeal private sector development on the people of the borough who need cheap rented accommodation as well as parks, schools, play areas, and the other social amenities that go to make a community rather than an executive housing estate.
On the other side of the river, Tower Hamlets has taken a more conciliatory line. The example of their pragmatic approach is the Regalian Property refurbishment of the notorious hard-to-let Riverside mansion council blocks. The property company is now bringing the poor standard council accommodation up to scratch. The flats will be priced from £25,000 to £45,000; they back on to the Shadwell basin, itself a candidate for a major facelift in the next couple of years. As with other LDDC schemes, council tenants and those on the council’s housing list will be offered first refusal.
Such a policy has in the past led to overnight queues by prospective council tenant purchasers of new dockland housing. Low cost housing finance furthers this end. The Riverside Mansion scheme offers a £10,000 top-up loan to Tower Hamlets tenants who want to buy. No interest is charged on the loan, but the accrued interest is taken out of the capital gain the owner makes on selling the property. Private builders have been asked to provide similar schemes.
The LDDC controls the cost of housing allowing a trade-off for the developer between the high priced and easily saleable river front property and the rest of the development. By allowing developers greater margins on the premium sites, the LDDC claims that overall prices for docklands housing has been kept to levels commensurate with London average incomes.
The LDDC claims that a substantial number of docklands homes is thus going to local people. In Southwark the proportion of council tenants who have elected to buy is over 50 per cent.
In the new year, the London Docklands Building Trust intends to offer 100 per cent mortgages at half the prevailing building society rate and on an earnings multiple of 4.25 times income. This is possible because the mortgage lender will take a stake in the rise in value of the property measured according to a dockland index of house prices.
The LDDC claims that its overall housing stock on completion will probably be no more than 40 per cent owner occupied with the remainder on some form of fair rent basis. In the meantime the more attractive riverside developments remain an attractive option for yuppies looking for a property deal killing. In a couple of years the Docklands Light Railway will be open and running. Sites such as Luralda Wharf (Barratts), Dudgeons Wharf (Costain), and Felstead Wharf (Wates) will be minutes away from the City and the West End. Nobody is guessing prices will go down.