- The complete guide to building a property portfolio
- London rental market remains changeable and hard to predict for 2023
- UK housing market could be set for a seasonal “spring bounce”
- HMO investment under the spotlight: what are the pros and cons?
- Will government offer loans to vulnerable tenants to pay off rent arrears?
- 21 property investment tips: How to invest successfully
- What are hybrid estate agents and why are they on the rise?
- UK rents have risen by 11% in past year after demand ‘bounce-back’
- Housebuilding soars to a 33-year high in England
- Liverpool sees surge of property investors thanks to regeneration
Why invest in the London property market?
Property has been long considered one of the most gainful asset classes in the UK for investors. For investors looking to grow capital and benefit from long-term income in a flourishing market, understanding how and where to invest is paramount. London, as the capital city of the UK, has and always will maintain a strong demand for property investment, career prospects and education – particularly from professionals overseas. Moreover, London stays ahead of any other UK city when it comes to house prices, making this central city an attractive spot for investors seeking capital appreciation.
In the wake of the 2020 pandemic, the economy has become uncertain and you may be wondering if this is the right time to invest in UK properties. Along with the changes in market trends, the property sector has experienced a shift in demand and favourable locations. However, London’s property market has proven itself to be robust due to its unmatched career prospects and growing development, and extensive regeneration. With that, the impressive profits produced through rentals and the upwards trajectory in house prices ensure London sustains its pivotal role in the UK property investment sector.
London real estate: What you need to know
- Property value growth: The average house price in London currently sits at £629,400. Property price predictions suggest that the capital city’s market activity will be highly varied across different boroughs. In central London, high-end properties remain the most expensive. Central apartments and houses are expected to rise in price by at least 8% over the course of the year 2022. Outer London house prices are expected to inflate year on year by around 3.8% – a sustained level of growth will offer landlords and homebuyers stability in the next few years.
- Rise in rental costs: Monthly rent costs have steadily increased over the course of the 2020 pandemic and proceeding years. However, forecasts project a further 5.5% increase in rental prices for 2022 and beyond. Among the areas with the largest increases in rent costs are Kingston, Bexley, Newham, Croydon and Hillingdon.
- Increasing annual yields: In the top-performing boroughs of London, landlords can reap the benefits of climbing yields in the next couple of years. The average yield is 3.62%, sitting comfortably within the 3-5% average range across the nation. However, strategic planning and involvement in HMO investments could reward investors with a 5-6% yield in prime London postcodes.
Property investments in London
London investment properties introduced by BuyAssociation
Our ongoing research into thriving locations, exciting upcoming developments and market forecasts empower our team to identify lucrative residential properties for our clients. We take time to closely examine population growth, rental demand, and regeneration projects. These key metrics inform our decision-making process, allowing us to seek out optimistic opportunities that provide a high return on investment.
Buy-to-let investors looking to curate a strong portfolio could benefit financially by focusing on the capital city. London is a location that should not be overlooked, regardless of fluctuations in the housing market. As the heart of the UK itself, London offers a magnitude of unique possibilities in the property sector and beyond. In order to maximise returns in a rapidly evolving market such as London, investors must obtain guidance from experienced consultants. At BuyAssociation, we specialise in introducing investors to UK property and providing advice, with a strong focus on off-market residential transactions.
As an example of the property types we source for our investors, have a look at our Hereford Road case study.
The growing build-to-rent sector in London
The build-to-rent housing model has taken the UK property market by storm. In a housing sector predominantly occupied by renters, homes designed for the sole purpose of renting are increasing in demand. Both public and private sectors welcome the emergence of the build-to-rent model amid concern over the undersupply of homes. The fantastic qualities and contemporary amenities that are integral to the build-to-rent model continue to attract thousands of young professionals across the country. With that being said, London – the UK’s business centre – remains a desirable destination for these properties to be built. By 2025, the soaring house prices are expected to have driven the majority of London’s population towards rental properties. This provides significant scope for investors to capitalise on build-to-rent units, which a considerable amount of renters will draw their attention to.
BuyAssociation takes a proactive approach to explore opportunities within the build-to-rent sector, as we consider this asset class to provide our clients with strong returns and steady income. If you’d like to profit from an emerging and lucrative market, talk to us today about your investment goals. We can connect you with developers constructing high-end, innovative and urban apartments that will add value to your portfolio.
Where are the best buy-to-let areas in London?
As the prime location for property investment, each and every area of London offers something unique for home buyers, tenants and landlords alike. We base our list of the best locations around the city on demand, price growth, future development plans and capital growth potential.
London property investors should know that East London has some of the best deals in all of the capital. Currently, the average house price in East London is around £386,000. However, some areas see prices start from as low as £130,000 – this is exceptionally low compared to house prices in central London that surpass £600,000. East London’s cheapest investment properties are based in Barking and Dagenham, whereas the highest costs of property can be found in Tower Hamlets. In all of London, Barking is the most affordable area to invest in property.
The range of rental market options across the east of London is exceptionally diverse, reinforcing why investors continue to be lured in by locations in this area. Not only is this section of London a popular destination for university students to live, but the public transport links also enable many commuters to travel in and out of the city centre every day.
There is a lower average property price in South London than in North London. Currently, South London’s property prices average about £480,000. Though South London has its share of expensive properties, there are also bargains to be found. Richmond is the most expensive borough in South London, while Croydon is the least expensive.
Many of the residents that choose to live in South London favour peaceful spots such as Merton, which is scattered with greenery and historical buildings. Landlords can expect to charge up to £448 a week in rental costs, as this is currently the average monthly cost for renting a home in this quiet borough. The SW19 postcode of Wimbledon is one of London’s most prevalent districts for tenants. Not only does it provide excellent access to the city centre, it is also home to the world-famous tennis tournament, which makes it a global tourist attraction all year round, driving up prices and rental demand.
The north of London is widely regarded as one of the most desirable residential areas in the city. The area has unrivalled transport links, many amenities, a lot of green space, and a wide variety of property types, including both contemporary new properties and period homes. Landlords who are investing in buy-to-let investment properties in North London can benefit from the high rental demand created by locals, commuters, people moving in from the UK and abroad, and students. North London is a favourite among celebrities too. If you’d like to benefit from a sustainable yield of around 5.8%, this is the area where you should be conducting your property search.
Many people who work in Central London or the City of London prefer to live in North London. Most commonly, commuters seek out properties near tube or railway stations, making travel from each zone easy and hassle-free. For those looking for buy-to-let property to rent to families, North London encompasses multiple green spaces, a selection of schools and an assortment of shopping centres and leisure centres.
If you’re looking for property that has the highest potential for demand and very limited void periods, West London is ideal. Located in the heart of West London is Heathrow Airport, numerous large businesses and a vast amount of attractions. Known for its flocks of big crowds on match days, Wembley Stadium propels the interest in this area of London, making it one of the key places that investors choose to buy and tenants choose to rent. Kensington and Chelsea remain the most costly to buy property, as the average home sets buyers back around £683,000.
BuyAssociation’s freehold apartment blocks in Reading
Investors that work with BuyAssociation have clear and precise objectives, which is why we work hard alongside our clients to achieve them.
We give our investors access to premium-quality freehold apartment blocks in this location that make valuable additions to landlords’ portfolios. As part of our commitment to our mission to source lucrative residential property, our experts identify Reading as a prominent area to secure high growth potential and profitable returns for investors.
As a result of our industry partnerships and group buying power, we have sourced a selection of freehold one- and two-bedroom houses in the heart of Reading. Highgrove Mews comprises eight contemporary homes, each designed with meticulous attention to detail. The stylish Highgrove Mews rental properties, due to be completed by May 2022, will provide investors with impressive yields in addition to strong capital growth over time.
BuyAssociation has a proven track record for connecting investors with developers, find out how we can help you secure profitable Reading property, discuss your portfolio goals with us today.