Property Investment Company In London
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Property Investment In London
London is the capital city of England and it is considered one of the world’s most important cities. It is the UK’s largest city and it is home to Buckingham Palace, the Houses of Parliament, the London Eye and Tower Bridge, to name just a few of the most famous tourist attractions. The London Underground is an integral part of the city and it is the oldest underground railway network in the world.
London is also one of the leading financial and economic centres of the world, serving as a particularly important location for international finance. London’s finance industry is based in the City of London and Canary Wharf.
There is regeneration occurring across the whole region, place with boroughs such as Tower Hamlets, Newham and Wandsworth enjoying some exciting new developments.
Why invest here?
London is a complex place to invest. It is not currently somewhere to invest if you are looking for very attractive yields. Furthermore, it is the highest value part of the country in terms of property prices and as such investing is very expensive, especially when you factor in your one-off cost of stamp duty.
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 Investments
Rental demand is huge in London, which makes it a great place for buy-to-let investments. Properties will never be short of tenants who are willing to pay the premium price to have close access to their workplace and the city's amenities. Yields tend to be tighter the closer you get to the centre as the prices are higher. However, by venturing further out investors can pick up buy-to-let properties at lower purchase prices, but with similar rental prices, which means yields are better. Ultimately, it is all about picking the right location to balance yield and capital growth to meet your personal strategy criteria.
Commercial real estate can be a brilliant investment, especially in London which serves as a popular 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. Plus, with London being such a prime location for businesses, higher rents can be charged. The latest data published by Statista Research Department shows the cost of rent for office space in London is the highest in Europe and the West End has average rents per square foot of £112.50. Prime yields for commercial property in London averaged between 4-4.75% at the end of 2018.
If you are unfamiliar with London but you’re looking to invest in the city, we recommend getting familiar with all the different areas. Below, we’ve picked out three areas we consider the best for property investment in London.
When in investing in central London, you have to bear in mind that it is where you find some of the most expensive property in the world, meaning yields tend to be low. For example, an area like Mayfair can offer as little as 1.5%. This is why some investors tend look slightly further afield but still very accessible to Central London.
This area of London can see cheaper property prices leading to stronger yields. You can even see premium inner district locations such as Canary Wharf offering 4.1%. Again, if you venture slightly further out you can find stronger yields with Foxtons reporting rental yields of 6.4% in Barking and Dagenham.
You can achieve some promising yields in South London and again, the slightly further out you go, the prices reduce and yields can increase. Areas such as Wallington and Mitcham can offer yields of around 4.7%. If you delve a little deeper and really look hyper-locally then you can find great investment opportunities such as Merton which encompasses areas like Wimbledon and offers yields circa 6.3% (Foxtons).
The other areas of London (North and West) also have good places for investing and are worth looking into if you wanted to invest in London. For more information on these areas, please feel free to get in touch.
Future Growth in London
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(0)203 627 3987 or via [email protected]
Typically, London prices do very well over the long term. For example, after the last major global financial crash in 2008, they excelled.
Savills published that between 2007 and 2017, London property prices grew by 63.5%. The average across the rest of the UK was only 15.8%, for comparison.
According to Zoopla (June 2020), the average price paid for a property in London is £642,890. The average price paid for a flat is £500,793.
London house prices has increased by 14.29% in the last 5 years (Zoopla June 2020). Hometrack’s latest report shows house prices have increased 1.1% between April 2019 – April 2020.
Realistically, you will generally get better yields when investing further north (such as Birmingham, Leeds, Liverpool and Manchester), as initial purchase prices and stamp duty will be considerably lower in comparison to London.
That said, if you pick certain areas of London, you can find quite good yields, but it isn’t easy. Totally Money’s buy-to-let yield map reports that London’s E12 postcode can achieve yields of 6.04%.
The HS2 will efficiently connect London with the Northern Powerhouses and will cut the commute time to and from these place. London Euston Station will be one of the stations along with Old Oak Common which is a new super hub and set to be the best-connected rail station in the UK.
“With the current prices in London it is hard to get a good yield or ROI in comparison to investing up north and prices don’t seem to be really increasing any time soon. That said, there are some areas to look out for with regeneration projects in the pipeline that means they are likely to experience good capital growth.” – Tobi Mancuso, Director.