London Property Investment: Should I Invest in London Property?

London property investment can be a confusing topic to discuss.

With sky-high prices and lower-than-average rental yields, property investment in London isn’t accessible for everyone.

Yet, the city still sees its fair share of investment, particularly from foreign sources.

In fact, a report from Statista in 2018 found that London featured 458 foreign investment projects – 12 times higher than Manchester in second place.

But why is this the case?

Let’s find out and explore three reasons investing in London is a wise choice.

1. London Rent Is Incredibly High

The main reason behind the continued real estate investment in London is the sky-high rental income generated from property.

According to Zoopla, London also has the highest rents, averaging at £2,190 per month as of December 2024.

For comparison, this is 292% higher than the UK national average, which is incidentally the highest it has ever been at £1,184 PCM, according to HomeLet.

In fact, London’s average rent is so high that it practically trebles the rent in every popular UK property investment hotspot.

2. Top Destination for Commercial Real Estate

While investments in London may not be the standout choice for residential property, commercial real estate investment is another story.

Taking advantage of London’s serious pull for businesses, investors from across the globe choose London as their ideal commercial property hunting ground.

In fact, back in 2019, a report from real estate firm Knight Frank found that London was the world’s number one spot for commercial real estate, seeing around £16.2bn worth of investment.

For comparison, this was higher than the iconic Manhattan (£14.3bn), Paris (£12.1bn), and Hong Kong (£8.4bn).

This considerable level of international investment sets commercial property investment in London apart from other European cities.

Around £3.69 billion was spent on commercial real estate in London in 2017 alone from Chinese investors.

Sadly, for prospective residential investors in London, the same cannot be said for residential real estate – something we will address in a later section.

3. Massive Regeneration in London

As the UK capital, London attracts the bulk of UK inward investment, which has led to some considerable regeneration in the city.

Ever since the 2012 Olympics, which were hosted in London, a series of transformative projects has helped the capital continue to flex its economic muscles on the world stage.

Likely, the most extensive upcoming regeneration efforts in the city are:

• Thamesmead – A 30-year master plan aimed at regenerating the Thamesmead neighbourhood. Work includes 8,000 new homes, 4,000 jobs, and improvements to 5km of riverbank and 7km of canals.
• Old Oak Common and Park Royal – A £26 billion project set to create a transport superhub, a brand-new high street and a £3bn Imperial College.
• Canada Water – Covering 53 acres, this is one of the largest mixed-use regeneration projects in London. It is expected to deliver around 3,000 new homes, 2 million sq ft of workspace and 1 million sq ft of retail, leisure, entertainment and community space.

The planned regeneration in Canada Water, in particular, is one to keep your eye on, as the expansion of the Jubilee Line by 2029 could likely help develop the area into a major transformation hub.

To learn more about UK regeneration, be sure to click the link and read our full guide.

Chapter two of the London Property Guide will analyse the London property market in 2023 / 2024.

In this section, you will learn about the latest house price growth data, as well as the newest growth predictions for London investment property.

Key topics:

• London property prices 2022/23.
• London property price predictions for 2023 onwards.
• Analysis of the London property market.
• What’s it like living in London in 2024?

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.

According to Savills, London is projected to see capital growth of around 17.1% – the lowest amount of any region in the UK.

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 2025 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.

Amenities

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.

Transport

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.

If you’re looking at where to invest in property in London and want the highest yields, the following five postcodes are perfect for you if you are interested in property investment in London.

The best property investment London postcodes are E20, E4, NW7, SE28, N9.

• NW7 – Covers the Mill Hill region and can generate solid 7.82% returns despite an astronomical average price on Zoopla of over £830k.
• E20 – Spans Olympic Park and Stratford and provides gross rental yields of 6.10% on average.
• SE28 – Consists of Thamesmead and delivers sizeable rental returns of 8.65%, with an average price of over £300k.
• E4 – Covers Chingford and Highams Park, offering rental yields of 4.43%.
• N9 – Spans the Lower Edmonton area and provides average house prices of over £360k with 5.61% rental yield returns.

Other areas that could be considered the best area to invest in London property are Ilford, Romford, Barking, Dagenham, and Harlington.

This is because these areas also offer decent yields, with high demand levels and high rental income.

Although still more expensive than elsewhere in the UK, property prices in these locations tend to be more affordable than in other London boroughs.

This is why market research is vital if you want to know how to invest in London successfully.

Without knowing the best places to invest in property in London, it can be challenging to make a healthy profit.

For the most successful London investment, be sure to consider the best property investment London postcodes mentioned.

In the penultimate chapter of our guide, we will be looking at alternatives to London property investment in the UK.

Here, you will find more affordable and higher returning options that compete with property investment in London.

You’ll learn more about the South East, North West, and West Midlands options performing well in the 2025 property market.

Key topics:

• London vs Luton
• London vs Liverpool and Manchester
• London vs Birmingham
• FAQs about property investment in London

Luton: An Alternative to London Property Investment

One of the primary motivators behind investors choosing to buy London property is the vast rental demand in the city.

Naturally, with a large portion of the population focused on London, the demand for property is vast.

But wouldn’t it be great if you could tap into this rental market demand and find a good rental yield in the UK without having to pay London property prices?

Well, likely, the best way to do this is to invest in a commuter town. Commuter towns are popular with London workers who cannot afford the sky-high prices offered by London.

Currently, London’s best commuter town is Luton.

Voted the best commuter town for two consecutive years by estate agents Jackson-Stops and voted the best place to invest for first-time buyers in 2021, Luton is a fascinating investment solution for London investors in 2023.

The Bedfordshire town outperforms London in every aspect of capital growth potential. While gross rental yields are slightly lower than in the capital, you can find world-class Luton investment properties like The Hive with huge 5% NET returns.

The town is also only 22 minutes away from Central London, making it incredibly popular for young professionals.

You can learn all about Luton property investment and eight reasons you should invest in the town in our complete 2025 guide. Just click the link to read more.

How Does Property Investment London Compare to the North West?

We know that London property investments in certain areas can offer a level of return on investment and some expected growth over the years to come.

But what about those who don’t wish to wait for growth and want to benefit from the highest yields possible?

The North of England has gained a positive reputation throughout the property market as of late.

Comfortably the best places to invest in property UK, Liverpool and Manchester boast some of the best market statistics in 2023.

Outperforming property investment in London through capital growth, affordability, and rental yields, the cities currently boast some of the most lucrative property investment strategies.

Affordability is especially vital for the North West’s superiority over buy to let London opportunities.

To make the divide between North and South a little clearer, all you need to do is consider what type of investment properties London offers for the same price up North.

Put £500,000 towards a London investment, and you can barely purchase a standard one-bedroom apartment on Zoopla.

Whereas you could buy a five-bedroom house with a large garden and driveway for the same price in Liverpool.

The prices of the properties at RWinvest are proof enough that Liverpool and Manchester offer some of the best deals, with our pioneering eco property, ELEMENT – The Quarter starting from just £74,950.

Look towards London off-plan property, and you’d definitely struggle to find a price anywhere close to this.

While London property investments and London investment property are incredibly popular amongst overseas investors, more and more people are choosing to invest in the North West thanks to the high potential on offer.

You can learn more about Liverpool property investment and Manchester property investment by clicking the links.

How Does Property Investment London Compare to Birmingham?

As the UK’s second city, you would be forgiven to think London buy to let opportunities outperform those in Birmingham.

But dig a little below the surface, and you will see that Birmingham property is offering far more lucrative investments in 2025.

Outperforming London in every measurement except 20-year growth, Birmingham is providing an exciting strategy in 2025.

With tonnes of regeneration on the way, including the introduction of 80,000 new jobs via HS2 and the Birmingham Big City Plan, the future of the West Midlands city is incredibly bright.

You can learn all about Birmingham property investment by clicking the link and reading our updated guide for 2025.

Here at RWinvest, we have several exciting buy-to-let properties for sale in London.

With prices starting from just £179,950, you can buy property in London, Luton, and South East areas, with up to 5% returns.

Our investment properties in London and the wider South East area include:

• The Hive – Revolutionary Luton investment property from £179,950.
• West Quay Royal Arsenal – London property investment from £390,000.
• Birch House – Award-winning property investment in London for £450,000.
• Centrum Court – Spacious investment property in London apartments for £410,000.

Just click the links to learn more about these excellent exclusive London property investments today.