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By Richard Evans Identifying up-and-coming areas where house prices are set to take off is practically the national sport in property-obsessed Britain. So the boffins at More Than, the insurer, have come up with a method of locating these property hotspots - and it involves Among the most promising areas identified by More Than's survey, along with several parts of London, are two suburbs of Liverpool and inner-city postcodes in Newcastle and Leeds. How much is your house worth? The research is based on the belief that the presence of large numbers of young, affluent professionals or "Yappies" is a sign that an area is about to move up in the world. To identify these Yappies, More Than looked at ownership of gadgets such as iPods and flat-screen TVs, use of services such as broadband and Sky Plus and frequency of holidays, among other factors. "The indicators chosen for the Yappy index are a reflection of the lifestyle habits of young professionals," says the company. "They have been used to spot areas that have an influx of these wealthy professionals - who tend to move to previously unfashionable areas and set new property trends." We decided to put the Yappie index to the test by asking estate agents in some of the "hotspots" identified whether they thought their areas really were ripe for a property boom. Holbeck straddles the Leeds & Liverpool canal just to the south of Leeds city centre. It is the 30th most up-and-coming area in Britain, according the Yappy index. "Holbeck was almost a no-go area but it has changed dramatically over past the past seven years," says Jacky Dods, a partner at Leeds Accommodation Bureau. "Property used to cost next to nothing - now it's expensive. But the area is still up and coming. It will be thriving in a couple of years. The city centre is full of expensive apartments; Holbeck is one of the few areas in Leeds where property is affordable and investors can make a return. "For example, a one-bedroom back-to-back house that would have fetched £15,000 not so long ago now sells for £80,000 or £90,000. It would generate a rental income of £400-£450 a month, so buy-to-let landlords should earn enough rent to cover the mortgage. A lot of back-to-backs have been converted for letting to young professionals by London investors. Landlords have bought whole streets and improved them tremendously - the rogue elements have moved out. I would buy here if I had the money." Find a buy to let mortgage with our partner Charcol Over the Pennines in Liverpool is the suburb of Childwall (33rd in the Yappy index). John Woollam, a valuer for local estate agent Sutton Kersh, has lived there for 40 years. "Prices in Childwall have always been rising over my lifetime - more so than in surrounding areas," says Mr Woollam. "It's convenient for the M62, two universities and two hospitals, and Manchester is only 45 minutes away. "It's a stable area - only three of my neighbours have moved in the time I've lived there and there are no buy-to-letters. I haven't noticed the age profile dropping in Childwall - the price of entry-level property is high, perhaps £200,000 in the small side roads. There are more young professionals in adjoining areas such as Wavertree, Gateacre and Mossley Hill. "I expect prices to be static in the next year as there is oversupply all over the city. But I have never known a dramatic fall over a two-year period. Childwall has always been an up-and-coming area and I would recommend it to buyers." In nearby Salford, between Manchester city centre and the redeveloped Salford Quays, lies Ordsall (17th in the index). It too is being transformed. "Millions of pounds in public money is being spent," says one local estate agent. "There are new developments of flats, it is walking distance to Manchester city centre and there is a train link. "So there is lots of demand and prices have gone up. Fifteen years ago you couldn't give houses away here; two years ago you could buy a two-bed terrace house for £40,000. A similar property now fetches £95,000. But the area is still up and coming, it'll be five years before it's finished - so there is scope for further increases, although not a lot, I think. "But there are two distinct markets - houses and flats. Lots of apartments are being built, but not many houses. So flats can be difficult to sell and some prices have fallen. There are too many buy-to-lets so there is a rental price war and some investors may not cover their mortgages. "They bought without doing their homework, often off-plan and without knowledge of the area. New-build flats are helping the area as a whole but you may not make money on them for a while." Many of the top spots in the Yappy index are occupied by areas of London. Two of them (ranking at 27 and 34) are in the north London suburb of Highgate. "The parts of Highgate singled out by the index are in the village area next to Hampstead Heath. They are both very affluent," says Angela Cruse of Anscombe & Ringland. "Prices are at a premium but always have been - we are not so much up and coming as there already. "But there are more young professionals than there were a couple of years ago and the area is more vibrant. It used to be more middle aged. The younger generation have more money to spend so they can afford the prices here now. There is more money for young professionals because of the trend of parents downsizing and I don't think there is a concern regarding a downturn in property prices. Nearby NW5 is more up and coming but also safe to buy." Michael Chan of Stonebridge & Co, another local estate agent, agrees. "There's plenty of demand and a lack of supply. Prices have been going up but not as quickly as they were; they may have peaked. Studio flats start in the low £200,000s. There are buy-to-let flats - the yields are okay rather than fantastic, about 4 to 5 per cent. The flats are easy to let though." Mortgage calculator - How much can I borrow? What do property experts think of the methodology behind More Than's survey? Peter Bolton King, the head of the National Association of Estate Agents, describes it as "interesting and different" and the means of identifying young, affluent professionals as a "reasonable indication of disposable income". "Spotting the areas where future house price growth will occur has become the holy grail for this nation of homeowners," he says, "and one indicator is to pinpoint the areas where young affluent professionals are moving - this tends to be an early warning that previously unfashionable areas are becoming more popular." But he adds: "The index may be indicating previous hotspots, especially in London. "This survey is a pointer. My advice to buyers is research, research, research - nothing beats legwork. Spend some time in the area, especially if you don't know it already. Stay overnight if possible, and visit at different times of day so you find out about busy roads, flight paths etc. Talking to people, in pubs for instance, is a good way to find out about an area." Jeremy Leaf, the estate agent and housing spokesperson for the Royal Institution of Chartered Surveyors, says: "Measuring things such as iPods could be significant but it may be finding renters who are not looking to put down roots in the area - they may not be able to afford it and end up buying elsewhere. "For buy-to-let investors this survey is a good starting point - it's not easy to work out the best places. Look at other things as well, such as new transport links and restaurant openings. This survey could be one useful tool but it's not conclusive." More Than says it may repeat the survey, which it believes to be unique, in the future. It describes the index as a useful guide to identifying up-and-coming locations, especially in areas not traditionally associated with property booms. "Among the places identified in the index there are pockets where prices have already gone up but most of them are up-and-coming," says Keith Maxwell from the insurer.
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