Why Invest in London Property? – A Summary for Real Estate Investors

When searching for your next investment, you can never go wrong with purchasing real estate - especially when the property is located in a globally decorated and renowned city like London. With a stable economy, thriving fintech sector and strong real estate market, there are little to no reasons good enough to deter you from an opportunity with so much potential.

Whether you are purchasing real estate to diversify your investment portfolio with a tangible asset that grows in value over time or as a buy-to-let investment, buying property in London promises high returns on a stable financial decision that you won’t soon regret.

If you are contemplating a real estate investment in London property, then this blog is for you. Here, we answer the question that’s bound to come up, “Why invest in London property?” by exploring the processes and benefits provided.

One thing you need to keep in mind when contemplating purchasing real estate is that you not only invest in the property, you’re investing in the city it’s located in too. You can’t purchase property just anywhere and expect to reap high rewards – you need to invest wisely – which is why London is your safest bet.

The UK’s capital is ranked as an Alpha ++ City – a position given by the Globalization and World Cities (GaWC) Research Network to cities that are the most integrated with the global economy and are linked to major economic states and regions. There are currently only two cities in the world that rank at Alpha ++ level, namely London and New York.

In and of itself, this prestigious ranking shows that London is a world-class city that is an economic powerhouse and attracts a wide cross-section of people from across the globe for a multitude of reasons. The top ones being:

• Booming fintech hub: London is currently home to over 2,100 fintech companies – more than any other global city – and is only expected to keep growing and expanding. These businesses include Google, Facebook, Apple, Amazon and Netflix.

• Retail, dining and leisure: From high-end shopping districts and Michelin-starred restaurants to picturesque parks and canals, when living in London, one is never at a loss for entertainment or convenience - after all, there is a reason why the capital attracts approximately 30 million annual visitors.

• History and culture: There are plenty of heritage sites, historic landmarks, architectural icons, museums, world-renowned galleries and celebrated theatres to be explored throughout the capital.

• Cosmopolitan melting-pot: The city has become one of the most culturally diverse cities in the world, with over 300 languages spoken around London.

• Education: London is home to 4 of the world’s Top 50 Global Universities, with over 100,00 international students alone currently studying in the city.

• Connectivity: Strong transport links make London one of the most accessible cities in the world, providing easy travel in and out of the city to anywhere in the UK and beyond.

• Crossrail: The new railway will be a high-frequency, high-capacity service linking 41 stations over 100 kilometres from Reading and Heathrow in the west, through central London, to Shenfield and Abbey Wood in the east - providing 1.5 million additional people with access to central London within 45 minutes.

• Global economic powerhouse: The capital is a global economic centre that continues to attract international investment, and it is expected that the city’s GDP will increase by 26% over the next 10 years (2019 to 2029), according to JLL.

We won’t pretend like the UK’s real estate market didn’t take a knock from the impact of travel restrictions, border closures and lockdown measures. Nor will we dismiss how the London market was negatively affected as a result of Britain leaving the European Union. And even though the market is slowly recovering, there is no guarantee that similar situations won’t arise in the future and have a negative impact.

However, these unprecedented times have not slowed the capital down for long, as London’s economy and real estate market is back on the road to recovery and is poised to make a massive comeback.

Since the beginning of 2021, both Savills and JLL have noted a renewed interest in urban locations, with these two companies, as well as Knight Frank, seeing a record number of new tenants registering in London in June for the year so far.

This comes as the world begins to adjust to the new normal and slowly opens up again, with restrictions being lifted, life returning to London and investment beginning to pick up. And with Millennials, Gen Z and Baby Boomers all opting to rent instead of buy, the rental market is set to boom.

Now that the UK is recovering from the impact of the pandemic and the politics around Brexit is stable with all parties involved striking an agreement for the foreseeable future, economists and experts in the real estate market all agree that the outlook for London is remarkably positive.

Furthermore, the capital is undertaking large-scale projects to improve connectivity and quality of life for its residents. Massive landmark regeneration projects are taking place all over London. This, of course, includes the highly anticipated Crossrail, a £15 billion infrastructure project connecting the West to the East in under an hour.

London’s future looks bright

1. According to 5-year forecasts provided by Savills, JLL and Knight Frank, house prices in the capital will carry on increasing.
   
   
2. High rental demand in London means high rental returns due to the ever-growing population and undersupply of residences.
   
   
3. Interest rates in the UK have been at an all-time low for the last 6 years, making borrowing increasingly cheaper.
   
   
4. Rent prices are set to increase over the next 5 years as landmark regeneration projects take place all over London.
   
   
5. Londoners prefer to rent rather than buy, which means you’ll never be short of tenants.
   
   
6. London is ranked as the second-best city in the world to invest in property, according to the Global Cities 30 Index.
   
   
7. The UK was ranked the ‘most transparent’ market in the world in JLL’s 2020 Global Real Estate list.
   
   
8. The weakened Pound provides a great advantage for international investors who are looking to purchase London property.
   
   
9. When investing in the right part of London, you can reap maximum benefits and profits from your property as it grows in value over time.
   
   
10. In the UK, it is possible to offset some costs associated with your property against tax.

Learn more with Magnate Assets

The information provided in this blog is just the tip of the iceberg when it comes to investing in London. If you would like to learn more on the topic, we have an in-depth guide available that details everything you need to know about buying property in the UK’s capital. 

Click the link below and leap into property investment in London