Article Summary

Many investors consider London to be one of the best large cities offering stability and liquidity, making London an appealing place for a long-term investment.

As London is also one of the most sought-after cities to live in and work for younger professionals, the demand for rented properties is highly strong as well, making it a low-risk option for Buy-to-Let investors.

The numbers behind the Capital

The Capital is arguably the most desirable city to live in the UK, with the highest population in the country as well as a continually growing population growth rate. The metro area population of London in 2022 was 9,541,000, a 1.22% increase from 2021, when it stood at 9,426,000. (Macrotrends)

London also boasts a projected house price growth of 21% by 2026 according to JLL, and already showed a 10.3% house price growth in the year to March 2022 (Hometrack).

In fact, it can be seen as a great reason to invest in London properties right now, when prices are lower than average, because these are likely to increase going forward. What is clear is that after a period of flat growth, London property prices are starting to increase once more.

With regard to rent increases, the UK city that showed the largest increase in average rents was London. The city finished 2022 on an average monthly rent of £1,976, with an annual increase of 16.1%, or £274 to be exact.

Positives for investors

The city offers a number of opportunities for investors to buy high-end properties and improve returns on property investments in London.

The London real estate market is particularly suitable for overseas investors, since they can buy properties for a far lower cost thanks to favourable exchange rates, whether it is for their own use or for generating a profit through renting the property out.

This is because overseas investors are able to receive a better interest rate on their investments, and they also get profit from rentals.

As one of the world’s most open and free markets, many large foreign investors are more than happy to invest in prestigious development projects in London. Many investors purchase London properties in order to be near some of the best universities in the world, and immerse themselves in its rich historical culture.

London is a leading city in the United Kingdom in terms of the attraction it has to foreign investors, tourists, and property developers in the United Kingdom. London ranks in the world’s top cities in terms of investment opportunities, infrastructure, culture, and economy. In terms of location, London remains the biggest attraction, offering the highest capital appreciation potential.

London is the centre for finance and education as well as being one of the major gateways of global investors. London has seen investments coming in from Asia, the Americas, India, Russia, wider Europe as well as Middle Eastern countries, so is is never in danger of the capital coming in from one specific region.

Of course, as with other UK cities, the particular area that you decide to invest in plays a major part in whether or not your investments will bear fruit.

Positives of investing in London

Despite the prices of homes in London being amongst the highest in the UK, investors can expect to receive good returns on investment (ROI). Although average returns are not quite as high as cities such as Manchester, one of the biggest reasons investors prefer investing in London is the capital appreciation.

While investors have the choice between large metropolises and suburbs, the yield on rents remains strong throughout London. Some areas do offer higher rental yields, but it is important to do your homework, because these properties generally provide lower opportunities for capital appreciation.

Investors are faced with a wider selection of properties and areas from which to choose, meaning UK property investments can be tailored to suit clients’ needs.

According to the Countrywide report, house prices in London are up 76% since late 2008, while showing that property prices are up 45.6%, on average, since early 2010. Investment in infrastructure in London, especially in transport schemes like Crossrail, is set to significantly improve connectivity across London, helping boost house prices across the capital.

There are a number of notable investment schemes being rolled out across the capital, especially in transport schemes such as Crossrail, which are expected to significantly improve connectivity across the city and help to increase property prices even more, both within the city centre and in other areas across the capital.

Conclusion

With London boasting these multiple advantages, there is no wonder as to why the city attracts investors from all around the world to build their portfolio in the Capital.

There are several new investment opportunities coming up even though the demand for property in London far exceeds the supply available, highlighting the exclusivity and prestige of available units.

To learn about the property investment opportunities above, or to find out more about how property investment works, get in touch with the experts at North Property Group today.