Property Investment London
England’s capital city sees vast numbers of tourists, overseas workers, graduates and investors heading there every year.
- London is forecast an 18.8% increase in rental values between 2020 and 2024
- The city had a GDP per capita of £56,199 in 2019
- House prices in London have increased by 14.29% in 5 years
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Overview
London is one of the leading financial centres of the world, serving as a particularly important location for international banking and finance. The finance sector, predominantly based in the City of London and Canary Wharf, is the bedrock of the city’s economic strength, helping to stimulate huge growth in the region.
Furthermore, regeneration schemes across the city aim to satisfy the growing demand for city-centre living, with many boroughs enjoying exciting new developments.
Why Invest In London?
However, it’s a different story when you look at what London has to offer by way of capital growth. For example, if you had bought a property for £430,000 in Q1 of 2014, then this year it would potentially be worth £526,046 (Nationwide HPI).
That is excellent capital growth and creates an unparalleled return on investment, especially after factoring in the rent you would have been receiving over the years.
Types of Property Investment in London
Buy-To-Let
Buy-to-let in London is a strong investment strategy, given the capital’s huge rental demand.
Properties will never be short of tenants who are willing to pay a premium price to have close access to workplaces and the city’s amenities.
Buy-to-let yields tend to be tighter the closer to the centre as prices are higher, but there’s still value to be had by venturing further out.
Ultimately, property investment in London is all about picking the right location to balance yield and capital growth.
Commercial
Commercial real estate can be a brilliant investment, especially in London which serves as a popular destination for companies to set up shop.
This mode of occupancy is particularly attractive as commercial tenants tend to secure long-term, full repairing leases (FRI), so the rent received is net of maintenance and operating expenses.
Prime yields for commercial property in London averaged between 4% to 4.75% at the end of 2018.
Popular Areas
Central London
Central London is home to some of the most expensive property in the world. Investors must bear this in mind as it typically means rental yields are lower. For example, an area like Mayfair can offer as little as 1.5%.
However, our own research shows such properties tend to enjoy the highest rates of long-term capital growth in the country, so any choice depends on an investor’s budget and objectives. Many investors seek a balance between the two by looking slightly further afield for properties that still offer easy access to the centre, but at a more affordable price and with better yields.
East London
South London
Other areas
The other areas of London (North and West) also have good places for investing and they are worth looking into. For more information on these areas, please feel free to get in touch.
Future Growth in London
18% House Price Increase in prime central London by 2024 – Knight Frank
2.8% GVA growth rate 2020-2021 – GLA
17.1% Rental growth (over 5 years) - JLL
9.54 million Forecasted London population in 2026 – London.gov.uk
Frequently Asked Questions
Below you can find a range of common questions from previous investors. If you require specific details and advice please do not hesitate to contact us today on +44 203 627 3987 or via [email protected].