Buying Investment Property in London

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London is home to a lot of great features and is a great location for buying investment property. As the capital of England, London is the largest metropolitan area in the United Kingdom.

London is divided into five sections; North, East, South, West, and Central.

This is a great advantage for people looking to invest in real estate in London. The famous key to real estate “location, location, location” really applies in London due to the vast amount of options you have to invest.

If you’re considering buying investment property in London, you will almost be like a kid shopping for candy in a candy store!

Population

According to Trueknowledge.com, London boasts a population of over 7.8 million. At one point, London had the largest population in the world.

London also has the highest population density in Britain, with 4,699 people per square kilometer. The population is beginning to become a bit more diverse than the past.

Once a strictly Christian society, London is seeing a growth of Muslims, Jewish, and non-religious sectors.

There are over 300 languages spoken throughout London. When investing in real estate, having a diverse population can be very beneficial. Having a huge pool of potential renters and home buyers to choose from will greatly increase your chance to profit off of your investment.

The Culture

As we mentioned, London’s population is becoming more and more diverse. And with any potential real estate location, it’s important to understand the culture of the inhabitants of the area.

Since people have been immigrating from all over the world to London, you’ll notice that they’ve integrated into the culture as well. Since London is one of the most popular cities in the world for tourists, this presents great opportunities to rent out properties to travellers looking to avoid hotels.

Tourists flock to London to see great attractions such as The Tower of London, The British Museum, and the National Gallery.

London Economy

London’s economy makes up for approximately 20% of the United Kingdom’s Gross Domestic Product. Some of London’s leading industries are fashion, art, film, design, law, finance, and web based businesses.

Tourism contributes largely to London’s economy, generating an average of $15 billion per year!

The economy has taken a hit due to the recent recession but they are bouncing back which opens up a great opportunity for real estate investors.

One group of people who are taking advantage of London’s reemerging economy is the Chinese.  Chinese investors are buying London properties in large numbers. 1 in 3 buyers of new London properties come from China.

What exactly are the Chinese buying?

London’s economy once thrived with their ports in the Docklands. The Chinese are looking to lift this area out of a hole and will capitalize when the area is rejuvenated.

London Real Estate

Obviously if you’re looking into buying investment property in London, you’ll want to know how much homes are selling for in the area. According to UK Property Search,  the median price for properties in London are:

Flats – £295,000 (approx $465,000 AUD)

Terraces – £339,950 (approx $536,000 AUD)

Semi-Detached – £420,000 (approx $662,000 AUD)

Detached – £865,000 (approx $1,300,000 AUD)

This puts London as the priciest area to buy in the nation. This makes sense since London is the center of England’s economy. With higher salaries,  come higher property prices.

The average salary in London is £29 000 ($48,874).

The average time on market is around 4 to 5 months as well, which shows that there is not a lot of demand in the market at present.

If you’re looking into investing in office space in London, expect to pay a hefty amount. Office spaces in London are sparse, so the prices reflect the inventory. This does present an opportunity for a high rental return for investors.

You can generally expect a high rental yield if you’re fortunate to find prime office space to invest in. Look into areas that are emerging, as most of the better known tourist spots are taken.

Buying investment property in London has a huge profit potential for the future.

While the economy is picking back up and new opportunities emerge for web based businesses, expect property prices to increase substantially over the next 5 years. Look into neighborhoods such as Walthamstow, the Bow area, and Clapton.

These areas are growing more and more populous and show great investment potential. This will give investors a great return on investment, which is really the goal of real estate investing.


 

15 Responses to Buying Investment Property in London

  1. Its interesting to note that international investors are heading to London. I would think that the city and economy will get a much needed boost from the trend in investment.
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  2. No wonder it’s a good location for real estate investors since it has all the factors for a business venture. Location, people, economy… all are at it.
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  3. Kerrie says:

    The same is happening in Australia with international investors buying up properties in the major capital cities…
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  4. The place is one of the beautiful places in the world. It is not a surprise to have so many realtors investing here. Given a chance, I would like to test the investing market too.

    Thanks for sharing,

    Best
    [email protected] Maryland private residence management recently posted..Virginia Beltway Real EstateMy Profile

  5. I think you can get better investment in the northern city’s in the UK like Leeds, Manchester, and more so Liverpool a fraction of the price and more affordable for real working people when you decide to sell.

  6. There is no doubt that London is a good place to but properties for investment. Apparently, more and more people and getting interest on this place and this could only mean good thing for properties and investors.

  7. No wonder it’s a good location for real estate investors since it has all the factors for a business venture.

  8. Last time a visited London, I stayed in the Chelsea area and I was shocked at the real estate prices and they were even worse if you were using American dollars, but I can definitely see the value there relative tot he job market.
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  9. In my opinion, terraces are the way to go. And as far as the tourism factor goes, the 2012 Olympics should be a big draw.

  10. How is the real estate environment in London? Is it affected by Italy’s economic woes.
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  11. Andrew Lace says:

    The olympics are gonna make this a sure winner.

  12. “There is no doubt that London is a good place to but properties for investment. Apparently, more and more people and getting interest on this place and this could only mean good thing for properties and investors.”

    I don’t know. The better parts of London seem to be in the process of overheating again. And it seems like 70% of the properties sold in these areas lately are sold to foreigners. Seems like a recipe for burst bubbles to me. However, if you’re not flipping well that’s a different story.

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  13. Brazil is going the same way, with many investors buying large properties.. It’s the “boom” of investing in real estate

  14. It is true that london is home to a lot of great features and is a nice location for buying investment property.
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  15. London may be more expensive than other areas of the UK but recent surveys have shown that central London remains popular in terms of rental yields and increasing prices.

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