Property Investment London

London is probably the trendiest City in the World, seeing a population surge of over 800,000 in the past decade requiring an additional 200,000 homes to be built, along with the huge effect this has had on employment and the overall economy. Forcing Infrastructure to step up its game with new projects such as Crossrail and HS2, along with the crying demand for a runway at Heathrow. Throughout history London has been a world’s economic powerhouse, we are currently in one of those periods. 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. London is currently sitting in 2nd place as the most powerful economy in the World, only just behind New York, but with considerably more value than Paris, Tokyo and Hong Kong.

The City doesn’t need much introduction, serious investors are more interested in the forecasts, figures and finding the best opportunities in London. For many, it is not a question of “should I invest” but “how do I invest”. We aim to help you with this decision, just get in contact and we will help you.

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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 possibly the best place in the World for property 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.

“The whole is greater than the sum of its parts”

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?

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? Well it is two entirely different leagues, and is not always about the percentage, 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.

Important Figures

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.