If you decide that investing in London property is the right choice for you, you’ll likely want to know about the capital growth potential of real estate investments in London.
Historically, London property has seen huge rises, with the average London property price rising by almost £600k since 2001.
Naturally, while these London house prices have seen considerable increases in the past, it has now reached the point where percentage increases are now very minimal.
This is highlighted in the latest property price predictions from Savills.
Property prices are set to decrease by 12.7% in 2023, a drop that is 4.2% more than the North West and Yorkshire.
There’s also minimal growth expected in 2023, 2024, and 2025, with an overall five-year increase of -1.7%.
How Has Covid-19 Affected London Property Investment?
While 2021 remained a promising year as a whole despite the uncertainty brought by the Covid-19 pandemic, the London property market has experienced some changes that have impacted property investment opportunities in London.
Most notably, the rental market in London has experienced a shift in line with changing rental market trends.
As a result of the Covid-19 lockdown, renting habits have changed, which has had dire consequences on the viability of London buy to let.
A 2020 report from estate agents Benham and Reeves found that the top three tenant priorities are fast broadband, outside space, and proximity to green space.
Due to the nature of central London buy to let, more and more people are choosing to leave the hustle and bustle of the capital for a more peaceful living experience elsewhere.
This is why modern developments like Central Park in Liverpool offer outdoor green spaces to meet this growing demand.
What Tenant Should You Target for Property Investment London?
With this new era of tenant priorities, what type of tenant should you target to make the best property investment in London?
Well, around 40% of Londoners are aged between 20 and 44.
This is significant for investors as those ages are typically referred to as Generation Rent.
Generation Rent is usually used to describe this age group as they are typically unable to afford hiking property prices and instead opt to rent.
With so many Generation Rent members in the city, it would be wise to target younger people.
This means providing more affordable properties to rent, modern facilities, and good access to transport links.
Given the percentage of those living in London aged under 19, another viable choice is to invest in student London investment property.
If you’re looking at London to invest in rental property, student accommodation can be an excellent investment.
One of the biggest draws of international investment in the city, London has one of the largest student populations in Europe, with 180,000 students in the University of London alone.
More and more property developers are providing student rental property and student accommodation in the city, so it may be a good idea to flesh out your London property portfolio with a student flat in London.
To learn more about student property investment, be sure to check out our all-new 2023 guide.
What’s it Like Living in London?
London is iconic.
With a population of nearly nine million, the city is renowned for being one of the best places to live and work.
Home to around 15% of the UK population, and 23% of UK-based businesses, the city is overflowing with opportunities for both work and play.
While the cost of living is higher than anywhere else in the UK, the city has so much to offer residents who can afford the commanding premium of capital city living.
Undoubtedly one of the significant parts of London living is the fantastic amenities on offer.
London has more amenities than anywhere in the UK, from restaurants, tourist spots, football stadia, and more.
In fact, in 2019, there were over 67,000 amenities in the capital, which accounts for 26% of all urban amenities in the UK!
Of these amenities, around 17,000 are classed as specialist, which includes world-famous destinations like the Royal Albert Hall and Wembley Stadium.
To put that into context, the next highest city, Manchester, has just 2,500 specialist amenities.
This means London accounts for a staggering 41% of UK specialist amenities.
Shopaholics and premium spenders also have a lot on offer in London. With high-end luxury outlets like Selfridges, London features more premium amenities than any other UK city – around 42%.
While these facilities are excellent, it has had a strong impact on the cost of living.
According to Numbeo, the cost of living in London for a family of four, not including rent, is around £3,000 – 46.53% higher than in Manchester.
The London Underground and the Tube is perhaps the most famous transport system in the world.
The Tube has been at the beating heart of London’s economy for over 150 years and allows Londoners to travel across the massive city in minutes.
Spanning 402km of tracks, around 1.35 billion passengers use the Tube services every year, covering about 83.6 million km annually.
The busiest station in the capital is Waterloo, with over 100 million annual passengers.
These are huge numbers and paint the picture of just how vital this unique transport system is for London living.
And the transport system is to be further improved.
This includes a £14.8bn Crossrail route and an HS2 route, which will massively help commuters coming to London from nearby towns like Slough and other major UK cities like Birmingham.