Alastair Stewart on developers following hipster fashions

Alastair Stewart is an equities analyst and consultant

Research by Savills last month identifies the five local authorities attaining the steepest growth in house prices over the past 30 years as: Lambeth (682%); Bristol (707%); Waltham Forest (725%); Brighton & Hove (797%); and, leading the ascent, Hackney, at 847%. The UK as a whole rose by 421%.

All five contain within their boundaries some of the UK’s most achingly trendy property hotspots. A similar pattern can be observed in the US. In Seattle – the putative birthplace of hipsterdom and, of course, Starbucks – home prices have grown by 450% over the same period against 306%, as recorded by the Case-Shiller Home Price Index.

I’m not sure why Savills chose 30 years as its timeline, but it corresponds to the term hipster becoming defined as “an urban subculture made up mostly of young, educated bohemian types living in gentrified neighbourhoods”, according to vocabulary.com. I’d change one word, to ‘gentrifying’; it’s their arrival that leads – eventually – to an area becoming gentrified rather than a result of it.

It’s the arrival of hipsters that leads – eventually – to an area becoming gentrified

The starting point in the evolution of these areas is cheap housing stock, ideally shabby Georgian or Victorian terraces or redundant warehouses and something of an ‘edgy’ local character. “These are areas that are culturally diverse and attract creatives,” Hamish Allan of the M Winkworth franchise chain tells me. He’s the associate director of four offices in the borough of Hackney, covering Highbury, Stoke Newington, Hackney and, by common account the coolest of all, Shoreditch, in addition to neighbouring Islington.

He has seen a range of dynamics at play during his 15 years at the agency. “The borough is a very diverse area, with loads of different local markets, which feel like little villages.” It doesn’t really matter if these are cheek by jowl with council estates.

Hipster heaven: Shoreditch’s period housing is at the forefront of gentrification in Hackney, east London

It’s a bit “chicken and egg” as to what arrives first: the creatives or the coffee shops, he adds. “A large pull factor for many is a lack of high street names with a focus on independent retailers. Vacant retail spaces are replaced by upmarket bakeries selling sourdough and oat milk lattes, which in turn pulls in Joe Public.”

Developers ‘smell the coffee’

At this point developers start to, as it were, ‘smell the coffee’, attracted by low land values. The chains start to follow, often to the angst of the early adopters.

But ultimately, the ageing process kicks in. “Areas like Shoreditch are great for first-time buyers but as families start and needs turn to houses and schools, the options become more limited, which is when we see migration to neighbouring boroughs in Hackney and Stoke Newington,” says Allan. “Scaling up to neighbouring Islington is often a push, price wise, so it’s not uncommon to find sellers moving slightly further out in Walthamstow.”

I headed up the Victoria line to reacquaint myself with what I recall as a somewhat intimidating locale many years ago. ‘Walthamstow Village’ already bears the hallmarks of Stoke Newington, but 15 years behind the curve. A gorgeously arrayed greengrocer with unfeasibly large ‘heritage tomatoes’ (at £9.95/kg) is a rye loaf’s throw from upmarket bakery chain Gail’s – the arrival of which caused consternation among the newly established population, a story that reached the national media.

Beyond the capital, Brighton is ranked number one in international relocation site MoveHub’s ‘Hipster Index’ (its score of 8.1632 a photo-finish with Portland Oregon at 8.1631 – based, among other inputs, “vegan eateries, coffee shops, record stores per 100,000 city residents” and, bizarrely, tattoo studios). Bristol (number four with Savills and 46 in the Hipster Index) displays another characteristic of an area on the up: a vibrant student culture – many of whom stay. Apparently, sealed bids for properties are back.

On that basis, my tip, already going through the early stages of a potentially stratospheric rise in prices, is a city that has been edginess personified: Belfast, at 40 in the index with a lively university population. On my last visit, the artisan coffee shops were already sprouting.

Alastair Stewart is an equities analyst and consultant