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Investor insights: London is a prime property investment destination

Investor insights: London is a prime property investment destination
 

Why invest in London property?

 

London is the UK’s capital and one of the world’s leading cities. Its enormous economy, huge population, outstanding transport infrastructure, world-famous higher education sector and a one-of-a-kind culture have combined to make it a leading property market favoured by investors from around the world.

This is a special city, and it is easy to see why so many people of all nationalities have decided to make it their home. Because of this, the London property market is one of the world’s most desirable. Read on to find out why it is such a good investment, and find out which area in particular is a hotspot for those looking to buy property in London.   

A booming economy

London is the centre of the UK economy, and home to one of the largest populations in Europe. The biggest companies from around the world are based here, and a rolling programme of major investments will keep the capital growing in the long term.

The city’s economy is worth more than £500bn annually, and it is set to grow much more in the coming years. Analysis from GLA Economics and the Mayor’s Office noted growth of 5.4% in 2021 in spite of Covid-19, and estimates we will see a further 6.9% by the end of 2022. London’s average household income and expenditure are both forecasted to expand in similar terms over the same period.

London’s workforce is estimated to consist of more than 4 million people, and the London 2030 report from Oxford Economics forecasts that London will see an additional 800,000 jobs created by the end of the decade.

A vast and growing population

London is also one of the most populous cities in the world. Approximately 9 million people live in London at the moment, with many more are expected to move to the city in the years to come. The latest data from the Greater London Authority (GLA) anticipates that London’s population will grow by at least 50-70,000 people a year going forward.

This is very good news for investors as it means that demand for rental property will continue increasing thanks to all the new arrivals. Areas like Clapham with outstanding transport links, world-class culture and an unbeatable living environment will become increasingly desirable to the thousands of young professionals moving to the city.

An education powerhouse

London is an academic powerhouse, with the most universities of any city in the UK. Many of these institutions rank highly in the QS World University Rankings 2022, including Imperial College London (7th), University College London (8th), the London School of Economics (27th) and King’s College London (35th).

As well as the quality of its education on offer, students from around the world are attracted to London due to the city’s diversity, entertainment, culture and history. All of these combined make London the UK’s number one university destination.

The sector generates more than £17bn for London every year and supports over 172,000 jobs in the city. It’s almost 400,000 students includes more than 115,000 overseas students from 200 countries who contribute a net impact of £4.6bn every year. What’s more, almost 70% of students stay in London after graduation, providing a further boost to the housing market.

A reliable and mature property market

This is an established and proven market which should inspire confidence in investors. It grows in a reliable way which offers large profits for investors without the ups and downs that can characterise some newer regional markets. London is a mature, reliable prospect.

Analysis from Savills shows Prime London prices ended the year with 3% gains, ahead of an anticipated 8% bounce in 2022. The agency puts this down in large part to the fact that international capital is freed up and easier to move as the pandemic continues to ease, with the expectation that London will be a major beneficiary of this. JLL predicts that London will see house price growth of 25.8% by the end of 2026.

London’s rental market is also in exceptionally good health. According to Rightmove’s Quarterly Rental Tracker for Q4 2021, tenants are returning to city centres in huge numbers following the easing of Covid-19. London is a major beneficiary of this with 10.9% rental growth recorded over 2021 according to Rightmove, and a further 8% predicted for 2022 by Savills.

The additional demand is pushing an already strained housing stock to the limit, and rents in Inner London (Zones 1 and 2) have seen an increase of 5.6% in a single quarter. Furthermore, Rightmove reports that competition for flats is up 94% and overall tenant demand increased by 34% in a year.

The picture improves even more as we look to the future. Savills forecasts that rental growth in London will be the highest in the country and above the national average. Whereas the rest of the country is looking at average rental growth of 17% by 2025, the capital is scheduled to see growth of 19.3% overall, following growth of 5.5% this year alone.

Outstanding transport network

London has one of the world’s largest and most comprehensive urban transport networks, with integrated services covering the city’s 32 boroughs. Buses, underground tubes, light rail, overground trains, road, river, cycle highways and more all combining to provide residents with a first-class transport infrastructure that makes London unique.

Transport infrastructure creates economic growth, and London’s transport network gives it a major advantage over all its rivals. It is the perfect place to grow a global business, commute to for high quality employment, find culture from around the world and so much more. London’s transport network is the city’s backbone and has played a major role in making the city one of the world’s leading destinations and property markets.

London is also the UK’s best connected city when it comes to the rest of the UK and indeed the world. The UK’s national rail network is centred on London and all routes lead there, including the mainline routes to the country’s other economic centres including Birmingham and Manchester. The upcoming HS2 high speed rail network will cut journey times to these cities in half and provide even greater economic benefits to London.

In the other direction, the HS1 high speed rail line connects London directly to Paris in 2 hours 16 minutes. London is also at the centre of a network of large airports including Heathrow – the busiest airport in Europe – Gatwick, Stansted, London City, Luton and Southend. From these airports you can reach anywhere in the world, and they are all easily accessible from Central London via rail and road.

Area focus: Clapham

Clapham is one of London’s most vibrant and exciting areas which is packed with bars, restaurants, shops and beautiful green space. London is a city where you can find anything and everything, and Clapham is the archetypal example of this, making it an extremely popular place for young professionals looking to get as much out of city centre life as they can.

Clapham Common is one of London’s largest, oldest and most beloved green spaces, and can be found in the heart of Clapham. Its welcoming green spaces complement and enhance the first-class urban environments that surround it, creating an environment that is the envy of London.

The area is also home to many of London’s most useful transport links, linking the area to the city centre and the West End. Clapham North Tube Underground Station gives access to London’s Northern Line, and from there you can access every other London Underground line easily. Next door to that you can find Clapham High Street Overground Station which opens up London’s circular Overground line, giving access to the few parts of the capital that the Underground does not reach.

Clapham is within easy reach of all London’s top universities including University College London, Imperial College and King’s College London via its outstanding transport links. This convenient location makes it a top choice for anyone studying in London who wants a short journey to their university without sacrificing any of the cultural highlights and lifestyle that a place like Clapham provides.

Clapham is also a fantastic location for families with younger children. The area contains high performing independent nursery and preparatory schools, including Thomas’s Clapham, Parkgate House School, Oliver House and Eaton House. There is a similar high quality of education available in the area at secondary and sixth form ages via Emanuel School which is a short walk away from Clapham Common. 

This is a fantastic time to make your next London property investment, and property for sale in London location like Clapham provides everything that investors love about the city. Find out more about investing in London by downloading our guide today

 

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Mallam Grant
Ginny Wai 2
Conor Armstrong
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