Property Investment Review
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London is the capital and most populous city of the United Kingdom, with a population of 8,538,689. The city's metropolitan area is one of the most populous in Europe with 13,879,757 inhabitants (ONS, 2015 data).
London is a leading global city and a meeting point for the world’s business networks and a centre of international trade and finance. For centuries, the capital has been the home of new ideas and trends, and can be considered a creative hub where there is always something new to do and to invest in.
|Average rents in Greater London peaked at more than £1,160 per month in 2014|
|In London, property prices have risen faster over the past ten years than any other region in the UK|
|With the house prices rising, investors can achieve substantial capital growth, higher than anywhere else in the UK|
|London continues to develop and invest in itself, with £100 billion worth of major development projects expected to transform London over the next decade|
London's residential market is outperforming the rest of the UK and has been for some time. According to LSL, average rents in Greater London peaked at more than £1,160 per month in 2014 and central London reached closer to £2,500 per month. The rental market in London remains strong as many would-be buyers, due to high property prices, are forced to rent. Unsurprisingly as demand exceeds supply, London saw the highest rental growth figures. House prices have also remained strong with values across London rising by 8% over the past 12 months and 14% for prime residential.
In London, property prices have risen faster over the past ten years than any other region in the UK. Prices have outperformed the wider mainstream market due to continued demand from investors both in the UK and overseas.
The average price of a house in London is now 2.2 times that of a regional home for the first time, according to the ONS. This beats the record set in 2008 when the average price of a London home was 1.75 times that of those in the rest of the UK.
London's population has grown every year since 1988, and it is likely that in the years to 2031 it will continue its steady growth. Therefore the city must accommodate the growing population.
With the house prices rising, investors can achieve substantial capital growth, higher than anywhere else in the UK.
London's appeal is stronger than ever and due to its low price volatility, it is seen globally as a trusted property market that compares favorable with other cities. The liquidity of the London market also means that entry and exit routes are always possible.
London attracts an increasing number of overseas buyers each year, with one out of every two new homes being snapped up by overseas investors over the past 2 years. Property in London has been seen as a safe haven for investors after the world economy crashed.
London's great transport network and a massive investment in infrastructure are other major factors in the city's appeal for renters and landlords alike. Huge projects like Crossrail are predicted to increase residential capital values around stations in central London by 40%, while the completion of the London Overground orbital network and the planned Northern line extension to Nine Elms and Battersea will only enhance the capital's appeal and values.
London is the driving force behind the UK's economy and is one of the world's largest financial centres, with every leading financial institution represented in London. Despite the current economic climate London's economy is expected to grow at a faster rate than New York, Paris or any other established global city, and to become the fourth largest city economy in the world by 2020, according to the Cities of Opportunity annual index.
The most influential decision-makers work in London, from global corporations and trade associations to international and national politics. London is also the gateway to the European Union's 27 member states, the biggest single market in the world, with a population of 500 million. In terms of workforce, London is home to Europe's largest regional labour pool with 9.8 million workers, one in three of which hold a university degree.
London will continue to grow as a world city with the population increasing by 700,000 people by 2016 according to The Telegraph. In order to accommodate this growth, targets are in place for 31,000 new homes to be built each year to 2017. The Mayor of London has targeted East London as a priority area for development, regeneration and infrastructure improvement and has a capacity for at least 104,000 additional homes and 249,000 jobs by 2016. London continues to develop and invest in itself, with £100 billion worth of major development projects expected to transform London over the next decade. A series of high-rise buildings are under construction or planned.
Battersea Power Station will be at the heart of a £4billion regeneration, with serious building work beginning in 2014. When complete, the development will include 16,000 new homes. An extension of the Northern line will include new stations at Battersea Power Station, dramatically reducing the journey time into the city.
All new developments in London come with a commitment to make the city a more attractive, well-designed and greener place. London's Thames Gateway development is the largest urban regeneration project in Europe. In all, London is investing in £190 billion worth of major development projects, including the Olympic Park in Stratford, which will transform London over the next five to ten years.
London was host the 2012 Olympic and Paralympic Games and has so far seen a £9.9 billion trade and investment boost as a result.
During the worst global recession in more than 60 years, the lead up to the 2012 Olympic Games helped generate thousands of jobs in Great Britain. It is estimated that the games will have generated £16.5 billion for the British economy by 2017 and an independent report projects that the total benefit to the UK from hosting the games could reach £41 billion by 2020.
The construction industry benefited greatly from the games, with a report revealing construction projects for London 2012 has given the UK economy a £7.3billion boost. With so many economic benefits already reported, London Mayor Boris Johnson has hailed the impact of hosting the 2012 Olympic Games. "Since summer 2012, the capital has seen a surge in overseas investment totaling billions from Croydon to Battersea to the Royal Albert Docks as well as seeing an extraordinary transformation of East London" he said. "This is delivering tens of thousands of jobs not only in London but spurring growth across the UK and helping the country sprint ahead in the global race for business".
The average price of property in London hit an all time high this month, at over £600,000. Capital growth prospects are therefore extremely high, with investors almost guaranteed to make money on a property in the city. The price of acquisition however is extremely high compared to the rest of the UK and yields in London are low, compared to what is being achieved in the other main cities.
During the worst global recession in more than 60 years, the lead up to the 2012 Olympic Games helped generate thousands of jobs in Great Britain. It is estimated that the games will have generated £16.5billion for the British economy by 2017 and an independent report projects that the total benefit to the UK from hosting the games could reach £41 billion by 2020.
Letting activity grew in London by over 50% in 2014, with prime rents reaching up to £60 per square foot. There are areas of London where property is more affordable to investors and yields are higher, due to the lower price. Watch out for up and coming hotspots including areas of vast redevelopment.
Risk Warning and Disclaimer:
The price of property can go down as well as up. Historic performance should not be taken as a guarantee of future performance. Geared property investment with mortgages can increase risk of losing money as well as increasing the possible gains. Mortgage products referred to in the website can be withdrawn by the lender or have rates or other terms changed without notice and reference to any products does not imply they are certain to be available in the future. Mortgages referred to may also have certain applicant restrictions and are for indicative purposes only although reasonable endeavours have been used to ensure that they are available at the time of publication and are applicable to a significant number of our purchasers. This site is for information purposes only and nothing on this site should be taken as definitive investment advice for your particular situation without you seeking additional guidance directly from ourselves or from other finance and property professionals. Property particulars on this site do not form part of an offer or contract. The developer and Assetz Property Ltd, whilst endeavouring to ensure complete accuracy in these property particulars, cannot accept liability for any errors. Valuations of property or indicated rents achievable are either estimated or derived from valuations and/or comparables and can change and should not be relied upon without your own additional valuation and research, but we have carried out reasonable endeavours to achieve accurate indications for these figures. All descriptions, dimensions, areas, reference to condition and, if necessary, permissions for use and occupation and their details, are given in good faith as provided by the developer and are believed to be correct. However, these are subject to change, especially, but not wholly, relating to any property that is off-plan or not yet complete. Any intending purchaser should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to their accuracy. The onus is on each individual investor to undertake their own due diligence, enquiries and inspections. Where shown, net yields are calculated as rental income less expected service charges less expected ground rent as a percentage of the property price. No void periods, optional letting agent costs, repairs or other costs are deducted. Our standard Terms and Conditions of Sale will apply. E. & O. E.