Skip to content

London Property Report 2023

Want to invest in the best property investment opportunities for 2023? Enquire with RWinvest today - we have amazing buy to let deals available with projected yields of up to 10-15%!

    Everything You Need to Know About London Property

    It’s been an unusual year for the London property market, and its solid reputation as a stable and lucrative investment has been questioned. Over the past twelve months, the overall trend in the UK property market has been characterised by slow growth and a lack of movement, and London has been hit hardest.

    So, how does property investment in London stand right now?

    Our report will provide a complete overview of the London property situation.

    Instant £10k Capital Appreciation

    Prices are increasing in our best-selling development on 1st December. Enquire today to lock in the lower prices and earn up to £10,000 immediate capital growth.

      London Aerial View

      London Property at a Glance

      • Average Property Price – £534,265
      • Average Monthly Rent – £2145
      • Average Gross Rental Yield – 4.82%

      Famously, property in London is substantially more expensive than the UK average. According to the UK House Price Index, the overall UK figure is currently £289,824, meaning London is over £200,000 pricier on average – an eye-watering sum for many investors.

      When it comes to rent, the capital is also much more expensive when compared to the nationwide average, which stands at £1261 according to the HomeLet Rental Index, with an average gross rental yield of 4.82%.

      Read our UK house price predictions for the next 5 years for a full breakdown.

      Instant £10k Capital Appreciation

      Prices are increasing in our best-selling development on 1st December. Enquire today to lock in the lower prices and earn up to £10,000 immediate capital growth.


      What’s Happening in the London Property Market Currently?

      Housing transactions are down in the UK, and London has experienced the most significant decline. 

      Buy-to-let landlords in London are selling up at the fastest rate in the country as high buy-to-let mortgage rates, tax changes, and energy efficiency requirements eat into their profits. Given the high rate of capital appreciation in the last decade, many are cashing out now and claiming big gains.

      Completed 2-Bed only £179,950!

      Limited 2-bed apartments available from £179,950 in our completed and tenanted Liverpool development. Assured Net income available on this back to market deal with major savings.

      Person pointing at stacks of block

      Are London Property Prices Going Down in 2023?

      This year, the UK housing market has been sluggish, and London has been most affected, displaying a sharp deceleration in price growth.

      Uncertainty and a slump in housing transactions have hit the value of property hard in London. With fewer buyers, houses are being sold at lower price points. The average price of London property still sits much higher than the overall UK average, but the nationwide trend towards stagnation in the housing market is worse in London compared to other regions.

      According to the UK House Price Index, London’s average house price for July 2023 is £534,265. Compared to July last year, this is down -0.8%. It is up slightly on the previous month, growing 1.1%, but when we look at 2023 as a whole compared to last year, the slowdown in growth is stark.

      Completed 2-Bed only £179,950!

      Limited 2-bed apartments available from £179,950 in our completed and tenanted Liverpool development. Assured Net income available on this back to market deal with major savings.

        A key with house key chain on a door

        What’s Happening in the London Rental Market Currently?

        It’s common knowledge that London rents are significantly higher than in other areas of the UK and have been rising rapidly, primarily due to a severe supply-demand imbalance.

        Zoopla’s property report revealed that the number of affordable properties readily available for rent in London is scarce.

        For example, the number of one-bedroom homes on the market for less than £ 1,500 per month has fallen from £2,066 in July 2022 to £1,146 in July 2023.

        Buy to Let Investment Guide

        Want to become a successful buy to let investor? Get our free investment guide today for all the latest tips!

        Download Guide Guide - Buy to let investment guide

        Liverpool Investment Guide

        Invest in the UK's most popular property market. Check out the ultimate Liverpool Investment Guide 2023!

        Download Guide Guide Liverpool Investment Guide
        London street view

        Rental Demand in London 2023

        As mentioned, London rents are significantly higher than average.

        This, coupled with the steep cost of living in the capital, has led to reports of renters moving out of the city in search of a more affordable lifestyle. Some have turned their sights to cheaper commuter towns, while others have decided on cities in the north of England where rent and living costs are much lower.

        But regardless of the climbing rental costs, demand for rental properties in London continues to far outstrip supply. While some renters have been priced out of the capital, London’s appeal hasn’t dwindled in the eyes of many others. The city is densely packed with world-class work and education opportunities that cannot be found elsewhere, attracting renters from other parts of the country and students and immigrants.

        The private rental sector also provides accommodation for a higher percentage of Londoners when compared with the UK average. Nationwide, one-fifth of households reside in private rental properties, but this proportion is 30% in London, putting more pressure on the industry.

        RWinvest Investment Finder

        Find the Perfect Investment for you.

          What's your investment objective?

          Minimum investment of 40k

          What's your estimated budget?

          What areas are you interested in?

          What size property interests you?

          Your exclusive brochure is ready!

          House models with up arrow

          Rental Growth in London 2023

          The supply-demand imbalance is fuelling a rapid increase in rental costs, as the HomeLet Rental Index states that the annual rental growth in London was 13%. From 2022 onwards, rental growth in London has exploded, climbing to the current all-time high of £2145 on average.

          Given the high demand for rental properties in the capital, this rapid increase doesn’t look set to abate any time soon. According to predictions by City Hall, the average monthly rent in London may rise to £2700 next year.

          For buy-to-let investors, the monthly rental income that can be earned from a property in London is considerable. However, this doesn’t translate to exceptionally high rental yields in many cases due to the very high property prices. In fact, some districts of London rank as the worst in the UK for average gross rental yield, such as Westminster (2.4%) and Kensington and Chelsea (2.5%). The overall London average is also the lowest in the country, according to Zoopla.

          Average gross yieldAverage monthly rentAverage price of a buy-to-let property

          Source: Zoopla Rental Market Report September 2023 (July 2023 data)

          London Underground Sign

          London Property Forecast for 2023 and Beyond

          Despite the current stunted activity in the London property market, many experts are optimistic for the future. There will likely be a return to growth in the next few years, but it is doubtful the market will flourish to the extent of pre-2016 levels.

          Property experts Savills predict that London’s mainstream capital value will see a return to modest growth from 2025 onwards.

          Year20232024202520262027Five years to 2027
          Mainstream Capital Value Forecast for London-12.50%-1.00%2.00%6.00%5.00%-1.70%

          Source: Savills Research, January 2023

          Join Our Mailing List

          Sign up to our mailing list today for information on the latest buy to let deals, new property launches, expert insights, and more.

            London Street View

            London Property Market Past Performance

            London’s property market has long held a reputation as a safe and lucrative option for investors. The market’s stability has been proven time and time again after economic and political upheavals such as Brexit and the Covid-19 pandemic.

            Over the past decade, capital growth has been particularly impressive, and property owners who have sold their properties after allowing them to appreciate have made incredible gains.

            Get Your FREE Buy to Let Investment Guide

            Contains actionable tips for property investors to help your investment portfolio thrive! Download today for a free copy.

              House model on a table

              Where Are the Best Areas to Invest in London in 2023?

              Currently, Barking and Dagenham is the cheapest place in London for property, and according to Zoopla, it ranks highest in the area when it comes to gross average rental yield. They calculate that this figure is 5.81%.

              This makes Barking and Dagenham a top choice when it comes to property investment in London.

              Newham comes in second for rental yields with 5.56% and has also been identified as a comparatively affordable part of the city for buying property. According to an article from the BBC, Newham displayed the most significant annual rental cost increase in the country, a hefty 20.9%. This suggests high demand for this area, and tenants are willing to shell out extra pounds to rent here, which is good news for buy-to-let investors.

              Bexley has the third-highest average rental yield for London, sitting at 5.38%. While previously considered a more affordable area of London, the value of property in Bexley has risen rapidly over the past three years as high-earners are priced out of the central London zones. For this reason, it is considered an area with good potential for capital growth.

              Beyond 2023, these areas are also set to gain a boost from regeneration, which is likely to positively affect rental demand, rental income, and capital growth in the future.

              Discover the best place to invest in property with our updated market overview.

              Instant £10k Capital Appreciation

              Prices are increasing in our best-selling development on 1st December. Enquire today to lock in the lower prices and earn up to £10,000 immediate capital growth.

              London Property Market Report Summary

              Trends this year have pointed to uncertainty in the London property market, which has significantly impacted house prices, creating a period of stagnation. Capital value growth has been subdued, and transactions are down, but property experts have classed this as the market correcting itself rather than a slump, and lower prices could lure buyers back into the market.

              But demand from renters for London properties has been seemingly unshakeable. This demand is down to London’s overall appeal as a place to live and work, offering job and education opportunities not found elsewhere. Immigration and an exodus of students into the private rental sector have compounded this frenzy of rental demand in the city.

              For more insights into the UK property market, take a look at some recent RWinvest guides:

              Avatar photo

              Jessica Ferris

              Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.


              Contact Us

              Want to Get in Touch?

              Fill in the form to contact us today and a member of our award-winning property team will be in touch to help.

                UM Google Review

                I recently had the pleasure of purchasing a flat from RWinvest, and I must say that my experience has been nothing short of exceptional. From the initial consultation to the final handover, every aspect of the process was handled with utmost professionalism, transparency, and efficiency.

                Umut Mutlu

                Google Reviews Logo
                AB Trustpilot Review

                I want to express my sincere appreciation for the outstanding service I've received during my property purchase. The entire process, from start to finish, has been remarkably smooth and efficient. Furthermore, I'd like to commend the excellent service provided by the team. Your commitment to ensuring a five-star customer experience truly shines.

                Angelina Bulgakova

                PG Trustpilot Review

                Like always it has again been a great experience with RW Invest. Chloe from the client care team was really helpful. She dealt with my queries very efficiently and professionally and supported me very well all the way through to the exchange.
                Andy from sales team was amazing as well in helping me shortlisting and finalising the unit I wanted to buy. Overall great experience

                Prab Gill

                Arrow left
                Arrow right