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Top London locations to invest in

Despite recent figures showing a slump in house prices in the capital, London still remains an attractive place for property investors. Brexit has put a slight dampener on things, as both buyers and sellers remain a little apprehensive about the investment potential. However, some boroughs are seeing significant regeneration and could offer an opportunity to invest, whether you’re looking to get on the ladder or add to your property portfolio.

Up and coming locations in the capital

Barking

This London borough is set to get a New York facelift soon with the council planning a project aptly named ‘mini-Manhattan’. Plans are afoot to construct high-rise homes and a central park along with improved station and shopping facilities.

Darren Rodwell, leader of Barking and Dagenham Council, said: “The skyline suggests a mini-Manhattan. But the new-look town centre will not be a playground for the rich — it must deliver truly affordable homes and a range of great leisure and retail facilities for ordinary Londoners.”

Hounslow

This west London spot is one of the last remaining places where first time buyers may be able to snap up a property without stamp duty. Although you’ll have to get used Heathrow’s flight path above, plans are underway to add new homes, revive shopping areas and modernise facilities to attract younger buyers to the borough.

Lewisham

While this south London spot is mainly served by buses and the main line into London, a recent project set to extend the Bakerloo line could see this location flourish over the next decade. Recent developments include Lewisham Gateway, which will see new shops, bars and restaurants, plus up to 800 homes and a community park space.

London Crossrail and rejuvenation of areas along the line

Crossrail has seen some significant setbacks in recent years, but that hasn’t stopped developments in locations along the line. With faster connections into central London, these are hot spots for anyone looking to commute into the capital.

Rightmove also recorded significant price growth of over 20% in over half of the stations. Some examples include:

• Seven Kings: Average property price £404,356, which is 21% up from 2015.
• Acton: Average property prices £611,255, which is 10% up from 2015.
• Whitechapel: Average property price £734,933, which is 24% up from 2015.

Is Buy-To-Let still a good way to invest in property in the capital

Rents in the capital are still the highest in the UK, and as prices increase and availability dwindles, it could offer an opportunity to invest in a buy-to-let. Location is a key decider when calculating yield and future return on investment, and although prime spots attract the highest rent, they also require a hefty chunk of change to purchase.

In recent findings from Totally Money, here are the rental yields of some of the top performing areas:

• East Ham – 4.81%
• Stratford – 4.45%
• Hampstead – 4.20%
• Hammersmith – 4.47%

Top performers highlighted that east London is seeing the highest yields whereas north boroughs offer less favourable figures.

Commercial property trends

The commercial sector has been predicted to be one of the hardest hit over the past few years due to Brexit uncertainty. Changes in the way people shop are seeing fewer stores on the high street, and rising rents are changing the landscape of office and warehousing space.

Figures from the Office of National Statistics have shown a decline in commercial construction work since December 2017. On top of that, rental growth has fallen too. However, income return from rents has remained stable since the vote.

This figures may not paint an overly positive outlook on investment in commercial property, but there are some key trends to consider to help you utilise potential investment opportunities:

Repurposing commercial space

In some areas such as retail, the landscape is ever-changing, and it will probably never go back to the good old day when the high street ruled supreme. Repurposing this space can regenerate the area surrounding it and offers something new to draw people in.

Shared offices

Co-working is a popular trend in modern offices, but you can also incorporate this on a larger scale. Sharing offices with other firms is a great way to keep rent and utility costs down, plus you won’t have wasted space. Additionally, as the office design and fit out specialists, Morgan Lovell, explain: “Co-working is highly beneficial to businesses as it can help to boost productivity and morale by encouraging collaboration and social interaction.”

Alternative commercial opportunities

Outside of the typical office, warehouse and industrial property investments, other options could be a viable profit maker. Why not look into student accommodation or storage solutions which both have significant growth potential.

Sources
https://www.homesandproperty.co.uk/property-news/where-to-buy-a-london-house-in-2019-the-property-hotspots-to-watch-with-big-transformations-in-the-a126646.html
https://www.standard.co.uk/news/london/revealed-2billion-plan-to-transform-barking-into-minimanhattan-a3789816.html
https://lewisham.gov.uk/inmyarea/regeneration/lewishamtowncentre/lewisham-gateway
https://www.portico.com/blog/landlord-advice/what-does-the-delay-in-crossrail-mean-for-property-prices-along-it
https://www.simplybusiness.co.uk/knowledge/articles/2019/05/best-buy-to-let-areas-in-london/
https://www.ig.com/uk/news-and-trade-ideas/shares-news/how-is-the-uk-commercial-property-sector-performing—-181127

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Christopher Walkey

Founder of Estate Agent Networking and an internationally invited speaker on how to build online target audiences using Twitter and LinkedIn. Writes about UK property prices, housing and affordable homes.

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