London’s property market has been adversely affected by several factors over the recent past, but property investment London may be a decent option for investors. While it’s true that there is most certainly value in other parts of the UK, it is also true that the London property market is very much alive and therefore deciding on the place for investment will depend on the investor’s financial goals.
Here are the main reasons why London and the South East could be an option:
Capital appreciation or rental yield
London is really a number of smaller housing markets and hence there could be options for both those looking for capital appreciation and those looking for rental yield. Significant investment in transport infrastructure, most notably Crossrail, has made some London areas more attractive both as residential and as commercial areas. In fact it has essentially created new commuter hubs. These may offer opportunities to investors looking for capital appreciation. At the same time, there are well-established areas which may offer options for reliable yield.
It’s no surprise that London is traditionally the most popular place to invest in the UK, due to the amount of potential tenants, opportunities and amenities that it encompasses.
At present, markets are emerging in and around the London Commuter Belt that are providing better growth, more affordable initial costs and accessibility to the capital, making property investment London an option. These locations are utilising inward investment to regenerate and transform their respective landscapes, building destinations where people want to live and work.
There are a variety of investment niches
When discussing the London property market, the residential market is probably what springs to mind first. There is, however, also a thriving commercial property market. As well as the constant demand for traditional office space, there is also a demand for more innovative forms of commercial property, such as co-working spaces, and specialist commercial niches ranging from hotels to care homes. The simple fact is that not only is London the UK’s most populous city, it is one of the most densely-populated cities in the world and that means that there is always a strong demand for all kinds of property.
The risk/reward ratio could be favourable
The impact of Brexit may not be the sort of slump which was first envisaged (at least by some). While financial services are indeed a significant part of London’s economy, it is uncertain whether Brexit will lead to mass job losses in this sector and, even in this worst-case scenario, London is a home to many other industries, in particular creative ones. In fact, London’s openness to innovative and even disruptive businesses is arguably what sets it apart from many other cities, particularly in Europe.
London has options for investors with short-term horizons as well as those thinking long term
It is important to note that, with regards to anything connected with property, these terms are relative, and London has opportunities for investors with different time-frames. The London resale property market has traditionally been an active one. The fact that London is a prime location for property development means that those able and willing to invest over the long term may reap benefits.
London has an international outlook
Unlike many other places, London not only welcomes people from all around the world as both visitors and residents, but allows them to enter the property market on the same footing as residents. This pretty much ensures a buoyant property market, both residential and commercial.
The financial and political stability that London enjoys has translated into a property market that may reward forward planning and a willingness to look beyond areas of traditional affluence. Renting out a London buy-to-let property can launch a lucrative portfolio. Whatever one’s investment goals are – preparation holds the key.
Set short- and long-term goals based on how much rental yield will be required and be prepared to revise and reassess.
An investor may research locations across the city or the fringe areas that may be valued lower than their better-known neighbours. Rental yields of around 5% could be attainable in certain London Underground zones.
An investor may target young professionals for rental purposes. This is a demographic that may provide income and low voids. In return, they expect top notch amenities and proximity to transport links, so they could be on the list of priorities when purchasing a buy-to-let home.
The job of finding and managing suitable tenants could be left to the professionals. Working with an established letting agent with local knowledge and experience of property legislation may provide a chance of success.
To some, managing the property could be an easy option, but things may turn difficult if one runs into legal red tape and the hassles of managing tenants. A Propertymark accredited agent may be helpful.
As you can see Investment in London’s property market involves extensive research and planning. However with this in mind it does all offer plenty of opportunities for would be investors.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.