A London investment has generally proven to be a good one since London is one of the most highly sought-after property markets in the world. It has beaten other places like New York, Paris, and other key areas many a time, and for good reason.
But the thing with London is that it is an ever-evolving location, and if you are thinking of making a buy-to-let investment in the area, you should be realistic. You need to know that London is comprised not just of one particular market for property, but a series of sub-markets which can make it quite a complicated area in which to invest. And what makes investing in London even more complicated is the fact that what you may think is a good area in London for a buy-to-let investment – such as near sights and attractions or in leafy, cosy suburbs – may not be the best area for a buy-to-let investment. So, what should you know about the best properties for buy-to-let investments in London, then? Let’s find out.
Central London is well known for having some of the most expensive and costly properties in the world. This means, then, that yields can be quite low. Some investors consider certain areas as not particularly viable for buy-to-let investments, such as Mayfair and Westminster. But here’s another fact to consider: property prices in central London have been on the decline in the past year, and in fact, in the city of London itself, as confirmed by the Land Registry, property prices decreased by almost 24% from July of last year. What this means, then, is that the yields for buy-to-let property in the area could become more attractive if the price of property continues falling. But there are some areas accessible to central London which are currently viable, especially when you look at places south of the Thames, such as Brixton, Battersea, Bermondsey, and Peckham.
After central London, West London can be considered the second most expensive area in the city, as confirmed by London property experts Gerald Eve (you can learn more about their expertise at Gerald Eve’s London Knowledge). Locations such as Chelsea and Kensington continue to be desirable for property investors. But if you don’t want to spend too much and are looking for West London areas with higher yields, you could consider areas located further, such as Brentford, Wembley, and Ealing. You could also have a potentially higher yield in areas near or surrounding Heathrow Airport due to the high demand from those who work at the airport. These include areas like Hounslow, with a return of up to 4.9 per cent, Harlington, and Hayes.
East London has always been seen as one of London’s less expensive areas for property, and it is therefore known for its stronger yields. The inner districts can be costlier, but places like Canary Wharf still have much potential, as does an area like Poplar. But there are also locations which are further afield that can present you with even stronger yields as well, and these include Romford, Ilford, Dagenham, and Barking.
The area of South London can effectively be divided into two sub-markets: there’s the south-west, which is a premier territory for commuters, but which also has higher property prices, such as Richmond and Wimbledon, and then there are other areas such as Wallington and Mitcham, which have higher yields. Although other areas in South London are not as ‘fashionable’ (most property agents would describe them as ‘up and coming’ areas), they have the potential for higher yields and lower property prices as well. These include areas such as Bromley, Thamesmead, Streatham, and Eltham.
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