One of the main questions asked by those investing in property is ‘should I invest in property London has to offer or should I look elsewhere?’. While there are some benefits to investing in London property, there’s also a lot to think about to ensure you’re making the right decision. Find out more in our helpful guide to London property investment.
Should I Invest In Property London?
London has long been considered the place to be to invest in property. England’s capital city sees flocks of tourists, overseas workers, and investors heading to London year after year to take advantage of the sights, attractions and opportunities available. Those considering their first investment in the UK might automatically look towards London property investment, but is this city really the buy to let investment hotspot that some of us might think it is?
Is property in London a good investment?
London property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of London.
High property prices
The Office for National Statistics reports that the average London home cost £115,000 twenty years ago, growing to an average of £351,000 in 2008 and standing at around £671,412 by 2018. Capital appreciation had long been the main force driving people to buy London investment properties, with the potential for London properties to grow in value over recent years. If an investor had purchased a London property for £200,000 in 2007, near Kings Cross station, for example, this would now be worth over £300,000.
However, this growth in London property prices comes with a decline in rental prices. In February 2017, the average rental property in London was let for around £1,280, presenting a one per cent decrease year on year. High property prices and lower rent means one thing for investors — some disappointing average rental yields. Those investing in off-plan property in London can expect yields at an average of 3.7 per cent, which is a lot lower than some other areas of the UK.
Potential for future growth
While the opportunities for property investment London offers aren’t looking particularly promising, things are starting to look up in the future. Several areas in London are expected to experience property growth by 2020. Whitechapel, Canary Wharf, Earls Court, Old Oak Park and Croydon are all predicted to make their mark on the property map, and make perfect choices if you’re wondering where to invest in London property. This is due to several regeneration projects set in place for the city, with plans for improved transport links and the creation of thousands of new homes and jobs. Select London investment properties have been predicted to reach rental yields as high as six per cent by 2020.