5 Ways To Spot A Good Residential Property Investment In London

Property

5 Ways To Spot A Good Residential Property Investment In London

Ready to expand your property portfolio into the British capital? We show you what to look for.

Published on 16 January 2018

If you are an investor looking to purchase a property in London and are not familiar with the market, choosing the right property can be like trying to walk through a maze blindfolded with your hair on fire. However, fear not! We’re here to tell you how to spot a good residential property investment in London.

1. Find the right type of property

A room with a view at One Tower Bridge by Berekely Group

The most sought-after properties for international clients are apartments, as their locations tend to be more central and the rental yield and capital appreciation from the short- to long-term are strong compared to other types of property. A studio to two bedroom property would be the ideal size.

2. Price

How much should I pay for the best returns? The residential property market in London as a whole is set to grow by between 19% and 22% in the next five years according to Jones Lang Lasalle. Berkeley Group – a UK developer of projects such as One Tower Bridge and Valiant Tower at South Quay Plaza – say the price range between £800,000 (US$1.06 million) and £1.5 million (US$2 million) is seeing the highest demand. This can vary by area, though one should really pay close attention to comparable properties when making a purchase.

3. Location

Spacious outdoor terrace overlooking the Thames at One Tower Bridge by Berkeley Group

You don’t have to be an expert to know that location is inarguably one of the most important aspects of a property investment. However, knowing why it’s a good location to purchase in is a different matter. A good location in London typically means being near a good transportation link (i.e. the Tube) – due to the high cost of car ownership in the capital. Crossrail is adding even more stations to the map and with that, come opportunities for better property investments as well as improved transportation across the city. South Quay Plaza – located moments from Canary Wharf, London’s fastest growing business district – is ideally located to benefit from the new Crossrail station opening at the end of 2018.

4. Apartment amenities

Swimming pool at South Quay Plaza by Berkeley Group

Well, this category kind of depends on your age. You see, according to a recent Knight Frank survey, younger renters are more likely to spend their hard-earned cash on comfort compared to the good old baby boomers. Gym, swimming pools, sports courts, weekly cleaning, roof gardens, you name it and the “iGeneration” (as they are called) will gladly spend it. Baby boomers are far less interested in “fancy amenities”, so when choosing an apartment in a particular location, make sure you know who your target rental audience is.

5. Timing

The Palace of Westminster

As they say, “timing is everything” in life – and this holds true in property investment. With Brexit on the table, people are a little unsure about what is about to go down. There are many positive aspects to the London property market that will remain including a high level of demand versus limited supply both in the sale and rental markets. London is also the top global financial centre in a number of different areas and that shouldn’t change. People will continue to want to live in London to study and the English language probably won’t cease to exist anytime soon. The UK as a whole was also just ranked the number one country in the world to do business in 2018. Sure, lower growth is expected in the near future, but when the dust settles, you’ll probably wish you got in while prices were considered “low”.

The bottom line

London is a resilient market, however, you should still do your research and ensure you are confident and comfortable in your investment decision. When choosing a property developer, it’s important to choose one with a solid track record. Berkeley Group is well known in the industry for their strong performance not only to their shareholders in which they returned a basic earnings per share of 467.8 pence in 2017 according to their Annual Report but also in their ability to finish high-quality projects on time and to the satisfaction of their owners.

The opportunities abound for residential property investors in London. Happy house hunting in 2018!

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