London Property Investments – A Good Idea?
The fact that it is the capital city invariably means that there is a huge amount of money available to fuel the buy to let property market with affluent tenants. Despite this, property investment in the capital sparks some of the most ferocious speculations by investors and cracking the London market takes more than a bit of luck!
London is often at the forefront of the property market; it is generally thought that price fluctuations hit London first, before spreading to the rest of the country. This gives investors the chance to make leading and cutting edge decisions at the forefront of the market, which opens up the opportunity for the greatest gains, and also potentially, the greatest losses.
Why London?
Government statistics suggest that the population of London is going to increase by 900,000, over the next ten to fifteen years. In addition to this increase in population, households are also becoming smaller and more people are purchasing second homes as pied-à-terre residences, meaning that the demand for property is going to increase dramatically in the next few years; and this can only be good news for buy to let investors.
Investors looking to enter the London market have to be very clever about where they pick their buy to let property. Areas of London are incredibly variable and just a few hundred metres can make the difference between a large rental yield and a vacant property.
Infrastructure
Infrastructure developments are key, in London. Commuters are generally entirely reliant upon public transport; therefore, where there are good links, there are generally commanding rental yields.
One of the biggest events, in recent London history, was when London won the right to stage the 2012 Olympics. This will, of course, mean that the east of London, in particular, will see a huge amount of public investment in the forthcoming years. In particular, the DLR public transport system is being upgraded and extended towards the Stratford area, meaning an inevitable rise in prices.
The whole of London, however, is likely to see an increase of approximately 0.2 percent in GDP, per annum. Thousands of jobs will be generated and this is almost certain to have a positive impact on house prices in East London, in particular. Areas that are likely to benefit most from Olympic investment include Hackney, Leytonstone, Canary Wharf, West Ham, Bow and Forest Gate.
This is not to say that other areas in and around London are not going to see considerable growth, in the next few years. London continues to enjoy substantial investment from foreign countries, from the Far East, Middle East and United States. With this investment comes a large number of professionals looking for suitable accommodation in some of the more affluent areas such as Soho, Mayfair and Hatton Garden.
Transport and leisure
Transport, in general, is being improved across central London, with extensions to the DLR making huge expansions in the Docklands area of the city.
Wembley and North Greenwich are both subject to a large investment in leisure, retail and housing, with a new stadium in Wembley and new leisure plans for the previously ill-fated Millennium Dome.
Battersea is also benefiting from the process of a power station redevelopment, which, aesthetics aside, will generate more than 7,000 jobs in the area, having a knock-on effect on the surrounding areas of Chelsea and the West End.
Eurostar is also expanding across London, which is bound to have a positive effect on areas such as Kings Cross that are likely to benefit, directly.
For those looking for a slightly riskier and longer term investment, Elephant and Castle is well worth a look. Currently, it is a very depressed area and prices reflect this. The area is set for major regeneration and, given its close proximity to the city, West End and the Eurostar station, this suggests that prices are almost certain to rise in the long-term.
London will always be a magnet for wealthy individuals who need somewhere central to live with good communications. Buy to let investors should not necessarily shy away from London prices; there is life in the old dog yet!
For more information on buying in London take a look at:
Popularity: 19% [?]
August 6th, 2007 at 12:44 pm
“London will always be a magnet for wealthy individuals” - I think this will always remain true as long as London continues to be one of the biggest “power plants” of the financial world. I think it will continue to attract businesses, especially investment banks, into London because of its connections, property and many other factors that were gracefully highlighted in this article.
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February 22nd, 2008 at 7:01 pm
If you’ve travelled around London recently, you can’t have failed to notice exciting changes with striking new projects, as well as refurbishment of run-down buildings such as petrol stations, factories, pubs, churches, hospitals, post offices and other former public buildings as new housing developments and wine bars.
Pubs are now prime targets for the savvy property investor. Often occupying prime locations with spacious yards, gardens and out buildings, they offer excellent property redevelpment opportunities
UK pubs are empty and pubs across the country are thretened with closure due to the smoking ban, competition from supermarkets or just changes in the way we live.
The licensed property market is being flooded with cheap empty pub sites ahead of the scrapping of concession rates for empty commercial properties on April 1st .
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