Best real estate investments in London in 2024, UK capital city property investing advice, Engish demand for rentals, British rental prices
The best real estate investments in London in 2024
February 18, 2024
This article was sent to us by Tegan Tomlinson [email protected]
for 1newhomes.com
but failed to complete the deal
The elite real estate market, like the rest of society, plunged into chaos in recent years. The past year disrupted norms across all spheres of life, and the elite real estate market remains no exception. Any investor seeking London property investments must consider how the epidemic could impact their plans. However, several reasons for optimism evidently exist. Here are five reasons why now presents a good moment to consider investing in turnkey real estate in London or Europe.
First, property values expectably will rise. We noticed substantial demand for London and Europe-wide real estate from existing clients, especially in the luxury sector where sales rebounded after a strong start in early 2021 and the inevitable second quarter decline.
Second, leveraging local knowledge enables you to secure advantageous deals. In our experience, finding a partner to work for you and care for your interests proves critical to maximizing returns on real estate investments. Real estate markets differ greatly across districts, so choosing the right one could make or break desired profits and high rental yields.
Third, interest rates sit at record lows. According to CBRE’s EMEA Property Market Overview report, it expects no short-term rate hikes until 2023. The ECB tends to keep borrowing costs artificially low. On 25 July 2019, the ECB decided to hold borrowing costs at 0.00%, 0.25%, and -0.25%. Amid financial market fraud, investors shy away from buying shares as unstable and expensive compared to government bonds. As a result, real estate provides higher rental yields than other assets. Vast financing exists for elite real estate deals.
Fourth, a new wellness movement spreads across the UK. We noticed people increasingly care about and willingly spend time and money on improving their wellbeing. Elite real estate buyers join this queue too, and European cities like Amsterdam offer them the desired sense of wellness.
Fifth, London real estate holds great potential. The main approach to increasing property value involves expanding interior space and improving functionality for future buyers, as we long advocated. This proves truer than ever as people desire openness to UK real estate investment opportunities. Numerous luxurious 1newhomes in London offer both improvement potential and the gardens buyers want. Notting Hill, Belgravia, and Hampstead offer excellent postal codes for investment as they provide more open space and greenery among other benefits.
London boroughs: popular locations for investment in rental property
While many investors seek to purchase property in the UK’s hotspots that currently proves cheap but will appreciate over time due to proximity to popular city centers, some real estate investors buy property in the UK’s fast-growing suburban towns like Bournemouth and Poole amid the housing bubble.
The UK may have seen better days, but its real estate market always remained strong. Many good investment opportunities still exist for real estate investors wanting to capitalize on the country’s property boom. London stays one of Europe’s most profitable places as millions flock to the capital annually. In fact, London property values grew a staggering 50% over the past five years and show no signs of slowing anytime soon. However, UK real estate does not come cheap, meaning foreign investors will need to find UK property with significant price growth potential.
North London, UK
North London contains some of the most expensive real estate in the UK. However, good value still exists if you know where to look! Her Majesty’s Land Registry data shows current property prices as follows:
- The average Barnet house costs £526,533
- The average Camden house costs £870,627
- The average Enfield property costs £400,000
- The average Haringey house costs £465,000
- The average Islington house costs £516,467
This area still offers fairly decent rental yields: average rents run higher than other London districts. Weston has flats fetching up to £1,300 per month. Finchley Central also ranks as another top spot for buy-to-let real estate investments.
South London, United Kingdom
South London real estate prices average lower than the rest of London. The current average southside price sits around £480,000, and several expensive hotspots and bargain deals exist too! One such bargain area for buyers could be Croydon, where you can find a great place for under half a million – not bad compared to other city parts like Richmond which holds a similar price tag but has just one tram line running through it.
Rental prices vary across London’s regions, but you will find certain spots prove more popular with renters. South of Westminster and Streatham Hill generally command higher rents as they sit closer commute-wise to central London than other districts on this city side with lower rates like Sutton or Croydon that may offer cheaper accommodation options depending on your needs!
West London, United Kingdom
The average West London property price currently sits around £663,000. This makes buying a home here more expensive than other city parts! The most noticeable exception? Kensington and Chelsea, which runs 8 times higher with average flat prices on some streets at £3,000,000 or above, yet cheaper areas like Hounslow exist where you can live in one charming little townhouse from £150,000 plus.
West London offers ample rental opportunities for many landlords. Areas near central London prove popular with city workers, wealthy Brits, and foreign residents, while western districts provide more affordable housing that still enables quick commute access due to proximity to Heathrow or Gatwick airports.
As of 2016, the average one-bedroom flat rent in North London cost £2,141 per month. Rental price summary figures show that between cities like Brent and Ealing, affordable rents can be found ranging from £1,621 to £4,431 monthly. In Hammersmith & Fulham, several more luxury properties exist where suitable tenants may pay up to £5,020 PCM rental income a year! However, taking West London overall, different house or area types can exist that provide higher yields of 3%+.
East London, UK
You may be surprised to learn that across London some of the cheapest real estate exists. Real estate investors seeking a bargain deal should look to East London, where average prices start around £386,000 and can go as low as £130,000! The priciest area is Tower Hamlets with an average per square meter price twice as high as anywhere else – but don’t let that deter potential homebuyers; Leyton will still be your best bet as it offers the best value without too much effort to find the perfect spot.
With East London real estate prices at record highs, it is unsurprising people start investing. Land Registry data shows several areas that offer investors optimal returns on their money: average house prices range from £303,000 for Barking and Dagenham residents to Havering – £377,000; Newham – £382,662; Redbridge – £432,138. New flats in East London are also becoming an increasingly popular investment option.
While East London real estate prices rank among the highest, yields still average over 3% overall. Research figures demonstrate how this impacts your monthly rental income: affordable property will net you around £1,000 a month while a luxury flat with high-end amenities costs about twice as much at £2,000. The great news? Rental yields in these areas can be anywhere from 4% (Barking and Dagenham) to 8%, making them not only competitively priced but also very generous given how much you will receive back from your capital investment!
Central London, United Kingdom
Central London yields prove less generous. However, the best you can get is 6% (Westminster). You won’t find better in any other London district! Average central London yields sit at 4.2% but this still far exceeds the UK-wide average of just 3%. This means central London’s top yields match outside it. As for London prices, well, they don’t come cheap! Renting a small studio runs around £1,000 a month, a one-bed flat about £1,200, and a 2-bed place around £2,000 a month. That’s double, YES double, the average monthly rental cost across all London!
Flipping homes constitutes a popular investment form for those who enjoy getting hands-on and doing the work themselves. Flippers take responsibility for increasing their property’s value so they can sell it for more than they paid to purchase it. Many investors prefer this type as no need exists to repair or renovate before selling – as long as you keep your property decent enough (and buy wisely), people will come straight away.
Havering
Havering proves a highly attractive place to live not only for its proximity and convenient transport but also for all the amenities available. Over recent decades, Havering’s businesses underwent capital growth which made this East London district an appealing spot for people across Greater London! The local economy encompasses many sectors, ranging from manufacturing, logistics, and engineering, with more intensive new developments in transport links like the soon-to-open Stratford Crossrail station by the end of next year, which will connect it even closer to central London while offering much-needed relief during work commutes between the suburbs on different ends of the city.
Ilford
Ilford makes an excellent spot for future investment! If planning it as your next home, we recommend checking out everything it has to offer. Not only will Crossrail soon connect with the rail stations here, but multi-million pound regeneration projects through public investment in real estate and construction also aim to create more local industry jobs as well as refurbish old buildings. And don’t forget – London prices rose 60% over five years, giving investors ample time before needing another mortgage; just be sure not to miss out by buying early.
Steps for investing in London real estate
Investing in London real estate presents an excellent way to start your own investment business. Demand for rentals and rental prices are excellent, so you can rest assured risk will not diminish anytime soon. However, some preparation exists for investing in London real estate.
In this article, we outlined the steps required when planning to invest in London real estate. Follow them and get ready to become a major investor!
Step 1. Choose the best location.
Your first step should involve selecting an area. Look at places that are hotspots for business and may soon see high demand.
Step 2. Research the local real estate market.
After picking a neighborhood, dig even deeper into the real estate market by searching online for all surrounding amenities and POIs (points of interest) in your area. You can use Google Maps to find all conveniences like schools, hospitals, and even bars and restaurants.
Investing in London real estate means living the high life!
Step 3: Find out how much you can borrow
This is a very important step as investing in London real estate can be costly, and you need to know if you have the means to purchase property. Mortgage advisors have a fantastic opportunity to help find you the perfect home.
They will work with lenders and brokers to help secure the right mortgage with affordability in mind.
Step 4: Research properties
Real estate agents and property portals are a great way to find your dream home. With so much property available, now is the time to start your search. It’s also worth contacting agents in the area you are looking to get advice.
Find out their top tips for up and coming areas, and don’t forget to think outside the box – maybe look further into surrounding suburban towns to save money.
Step 5: Arrange a viewing
Once you’ve found a property you’re interested in, it’s time to get booked in for a viewing. Virtual viewings have changed the game for real estate agents. You can now get a feel for whether a property suits your needs before wasting time viewing it.
Step 6: Make an offer
You’re about to make a big decision that will change your life forever! The process is tricky but exciting. Making an offer is a serious step not to be taken lightly.
Step 7: Agree on the sale
When the seller’s real estate agent has all your contact details, they can confirm the sale has been agreed. You will receive an official document called a ‘Memorandum of Sale’ to confirm this.
Step 8: Transfer
When you’ve finally found the best investment property, it’s important to contact a property transfer solicitor as soon as possible. Full buyer and seller information gets passed between them until completion of sale.
Step 9: Apply for insurance
Get quotes to insure your building and contents. You can do this online or contact insurance brokers to get competitive deals.
Step 10: Sign the contract
Once the buyer and seller agree on the price, they sign a contract called a ‘Contract of Sale’ to seal the deal. At this point, you will need to pay the full deposit.
How to choose the best real estate investments in London
Your resources and goals constitute the most important factors when investing in real estate. For example, if you want quick cash and are willing to risk higher potential investment returns, house flipping may suit you, but if you want long-term investments and to build equity, you should invest for longer durations.
If you want an area to be desirable and the property easy to rent or sell, your main focus should be on location and amenities, not just price.
If you seek a quick return, ensure your property resides in an area with high housing demand. Given the growth of London’s major universities over the past few years, investing near a university campus offers a big plus.
You should also consider the number of rooms, property age, and how easily accessible public transportation proves from the location. It may help to look for recently refurbished properties or those just needing interior fixes, especially if discounted in price.
Investing in London real estate actually involves great complexity, but if you stay cautious and really do your research, hopefully you will find something suitable. If you want a diverse city to put your money into, London certainly offers ample options from family homes in the suburbs to commercial real estate downtown – there will always exist something matching what you desire!
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