Property Investment London

Voted “Best City in the World” in the 2019 TripAdvisor Travellers’ Choice Awards, London’s exciting history, creative energy and cultural vibrancy can be felt in every aspect of life in the UK capital. This also makes it an exciting prospect for investors.

The City itself needs little introduction; throughout history, London has been a world’s economic powerhouse and is regarded as one of the most desirable cities to live, work, and enjoy your leisure time. It’s also one of the most sought after investment locations.

A forecast conducted by Savills has estimated that Property prices are set to increase by 10.4% on a yearly basis, this along with rental yields paves the way for huge investor profits. Seeing a population surge of over 800,000 in the past decade, requiring an additional 200,000 homes to be built, it comes as no surprise that this has had a significant impact on employment figures and the overall economy. This rise in interest in the UK’s capital has forced infrastructure to step up its game with new projects such as Crossrail and HS2, along with the crying demand for additional runways at Heathrow airport. 

When it comes to investment, we know that serious investors are interested in the forecasts, figures and finding the best opportunities in London. For many, it’s not a question of “should I invest?” but “how do I invest?” We aim to help you with this decision, so if you have any questions, please do get in touch and our senior portfolio managers will be happy to help. 

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Why Invest In London?

Without trying to undersell anywhere else in the UK or even the world, it is a well-known fact that London is one of the most desirable cities in the world when it comes to investment. There is only one minor catch, realistically you will need millions and need to have an impressive investment portfolio from other areas before you can start thinking about the biggest fish of all. Most economic figures for anywhere outside London have to exclude London as a competitor as they simply do not compare, they often quote something along the lines of:

“Birmingham has the highest population OUTSIDE OF LONDON”

This shows the cities’ true dominance in the UK and could easily sustain itself as an independent nation if it truly desired. During the triple dip recession starting in 2008 the UK’s economy was in negative growth, but London actually grew by a total of around 15%. 

Building work never ceased and occupancy in all types of property never lost out, London is a true economic rock for the UK. As transport in the UK continues to improve with lines such as Crossrail and HS2 linking London with many other parts of the country it will create a mass gravity where London is expected to turbo charge not only its own economy but all cities and areas with the fastest transport links.

4%

Projected increase in property prices in London over the next five years (2020 – 2025)

6.2%

Average rental yield on property in London

$5.7bn

Invested in commercial real estate in the UK in 2019.

A Game of Cranes

London over the past decade has caught the attention of many writers, bloggers and media personnel for its incredible skyline of cranes. At first it was just a bit of fun as the city literally resembled a game of SimCity in fast forward mode. It did not take long before investors started looking at the real meaning of this vast number of cranes. With crane rental companies reporting record numbers of rentals and falling short of supply the city is clearly growing. Many correlations were quickly established between the number of cranes and all figures around London’s overall economy. It may be a crude sign to investors but has strong merit behind it.

With an average house price of £455,984 London is far too heavy for most first time investors, and to actually find a house and not an apartment at this price is no easy challenge, as you may only find such properties away from the inner city. Assuming you have got the capital and are seriously looking to invest, what can you expect?

What Can You Expect from Investing in London?

The overall average rental yield in London is currently standing at around 5% or just above, which is far lower than Manchester’s 7.98% average, so why do people still invest in London?

Firstly, it has always been harder to convince real investors to go outside of London as the security is better with minimal risks (although this is now changing as other cities make a strong foothold with global investors) and also if you have a lot of money then you need something that can handle it. By this we mean that in the London Buy-To-Let property market it is far easier to spend millions of pounds in one investment, whereas in say Liverpool you will have a harder time finding that much property to put all your capital into, simply because so many smaller investors have already invested in much smaller markets Therefore it is easier to invest big in London.

Another key reason behind London investment is that its market is far more susceptible to highs and lows. Looking at any data such as employment or property prices London compared to a northern city is far more erratic. Even though over a long term period growth is relatively the same, other cities have far smoother trends of growth. But it is these Highs and Lows that allow investors and consultancies and obviously us to pick the right moment to sell properties at their most profitable, property yields are then far higher when the market is at its average rate, or even just selling the property for a short term profit.

Employment

Total employment is estimated to go from 396,800 in 2014, to 435,700 by 2025, which is equivalent to a 10% rise, but Greater London is set to rise by 404,000 new jobs in the same period, this means that 1 in every 10 new jobs will be based in the city. It is estimated that 20% of these new jobs will come from legal services, accounting, head office activities, management consultancy and other professional services. With these industries having the highest average salaries competition on property prices will continue to soar. In addition to this, the huge demand for skilled labour such as carpenters or bricklayers coupled with the huge increase in new construction work means London’s labour workforce can also compete in this competitive housing market.

The City of London operates with around 16,580 separate businesses with 2695 of these being in the finance and insurance sectors, 2 of the highest paid industries.

In total London outstrips every City in the UK in its ‘Gross Value Added’ which is estimated at around £45 billion In the City of London, which is 3% of the UK’s total, and wider London accounts for about £334 billion or 22% of the UK’s total Gross Added Value. Whilst London is vastly superior in size to the rest of the UK’s economy, as an investor, there is still 78% of the UK’s economy to take advantage of if London is too expensive.


Invest in Student Property with Sterling Woodrow

Whether you are a first-time investor looking to understand your options and make the first steps towards building your portfolio, or an experienced investor looking for someone to effectively manage your investment, our team goes the extra mile to deliver exceptional service and results. 

  • Total of 75 years’ experience in the property market 
  • UK-based and international offices for home and overseas investors
  • Excellent scores on Trustpilot noting our knowledge, professionalism and return on investments

London Property Investment FAQs

Where should I buy investment property in London?

It depends on the kind of investment you are looking to make. For buy-to-let opportunities, we’d recommend looking to East London. Locations such as Ilford, Romford, Barking and Dagenham can offer rental yields of between 4-5%.

If you are ready to take the next step and learn more about the property investment opportunities in London that are available through Sterling Woodrow, contact us today and we’ll start your investment journey together. 

Hotels

High-growth investment sector expecting to soar

Purpose Built Student Accomadation

UK’s strongest performing asset class in recent years

Care Homes

Increase in demand with an ageing UK population

Are you ready to take the next step?

To learn more about the investment opportunities available through Sterling Woodrow, contact us today.