Let’s start with a basic question, what makes London special and set apart from any other city in the UK? London is a 24 hour city, bustling with extravagant sights and sounds. The capital is awash with culture and heritage found from its markets to museums. London is growing in terms of population with an estimated 9m living in the capital.
As the city grows, it brings in plenty of business and tourism, so unsurprisingly, the city has an influx of workers looking for opportunities to work there. These workers inevitably would take residence, driving up rental and home ownership demand exponentially.
For an investor, inner London (Underground Zones 1-2) can be dauntingly expensive to invest in property. As renters and buyers know, some properties are out of their budget so only a limited amount of people will be looking there. The towns in the outskirts of London (Zones 3-6), could be a source of opportunity to build up a portfolio. Look at websites such as the UK House Price Index or Mouseprice for latest house prices in key areas.
In the buy to let market, where renters could be looking for a place that is close but doesn’t stretch the bank. Your task as an investor is to find a property in an up and coming area that can cater for most people (not just those millionaires) for greater and consistent rental yields. In terms of travel time for the average commuter, look for opportunities in a 30-40 minute radius of major areas in London. Transport links is a massive deciding factor for London renters so don’t overlook this point.
In summary, look out for affordability (even if the average price for property in London stands at £605,437 according to Zoopla). If you are looking to invest in the buy to let market, there’s not much point pricing out the majority with a high end property. If you are looking to make a profit, your highest capital growth would come from an abundance of buyers. Be aware of the pros and cons of transport links and about the underground lines, in particular which ones are more prone to disruption.