Homes with river views: Londoners are paying premiums of up to 93 per cent for Thames views, new report reveals

A view of the Thames is a London property's most expensive asset, but some views are worth more than others...
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Ruth Bloomfield1 May 2017

Forget about loft conversions or a parking space — a view of the Thames is a London property’s most expensive asset, a new study reveals. And if that view includes a glimpse of Tower Bridge or St Paul’s Cathedral, expect an extra boost in price.

The report, published by Cluttons property consultants, compares relative cost of homes overlooking the river with similar nearby “inland” properties.

An average riverfront home overlooking Tower Bridge will now cost you £1,285,000. An inland home with all the same features but no river view costs an average of £667,500.

The biggest price premium was found to be around Borough, at 93 per cent. Premiums are almost as high at Shad Thames — where an average £1.45 million buys a river view home, 89 per cent more than a non-waterfront home at £767,000 — and on the South Bank, where you’ll pay £1,367,000 as against £737,500, or an 85 per cent difference.

£4.65 million: this three-bedroom duplex penthouse in Shad Thames

RENTAL PREMIUM FOR RIVER VIEWS TOO

Generation Rent is also willing to pay over the odds for a view. A home at Shad Thames with water views, perhaps with a backdrop of Tower Bridge and St Katharine Docks, costs an average £730 a week. This is £240 or 49 per cent more than a non-riverfront rental. So over the course of a year, gazing at the river would cost a renter in Shad Thames well over £12,000.

On the South Bank a rental with a river view costs an average £710 a week, 43 per cent more than a home without the view at £495 a week. Around Borough, renters pay a 39 per cent premium for a water view — £680 a week versus £488.

“In a congested city like London, riverside homes with balconies compensate for lack of garden space and offer river views and outdoor space, perfect for entertaining,” explains James Hyman, Cluttons’ head of residential agency. “Homes around South Bank command the highest premiums as they offer the most interesting views across the City skyline.”

LOOK EAST FOR LOWER RIVER VIEW PRICE PREMIUMS

Further east buyers continue to pay waterfront premiums, but the difference is less dramatic — 42 per cent at Wapping, 33 per cent at both Limehouse and Rotherhithe, 25 per cent on the Isle of Dogs, and a relatively modest 19 per cent at Canary Wharf. The cheapest location to buy a home overlooking the Thames is around Rotherhithe, at an average price of £505,000.

£2.75 million: a two-bedroom warehouse conversion in Butler's Wharf

Renters are also less willing to pay over the odds for a view of the eastern stretch of the Thames. Those living at Wapping and Canary Wharf pay 30 per cent and 29 per cent more respectively for a river view, but a view from Rotherhithe only commands an extra 21 per cent. At Limehouse the rental premium for a glimpse of the Thames is 15 per cent.

The cheapest way to enjoy a view of water is from the Isle of Dogs, where the riverfront rental premium is just six per cent, so you’ll pay £445 per week.

PAY DOUBLE TO SEE THE THAMES FROM BED

Overall Cluttons found the average price of a waterfront home on the stretch of riverfront between the South Bank and the Isle of Dogs is £939,375. A property without a water view along the same stretch would cost £590,313, representing a riverfront premium of 57 per cent.

Meanwhile, the average weekly rent of a riverfront home here is £585 — 23 per cent more than for a non-riverfront property which comes in at an average £450 per week.

Water views are hugely popular, but waterfront sites are limited along the entire length of the river. “River-fronted properties generally retain their value due to the finite amount of London riverside that can be developed,” adds James Hyman. “Demand will always outstrip supply.”

This might also explain why areas such as Canary Wharf and the Isle of Dogs, where new skyscrapers with fantastic water views are being built at a tremendous rate, command lower premiums. Waterfront homes in these areas are in significantly more plentiful supply than along the generally low-rise 2.4-mile stretch from the South Bank through to Shad Thames.

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