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Investment Properties in London – Are Prices Dropping?

For several years now, London property prices have experienced almost non-stop growth, with homeless charity Shelter revealing that house prices are growing fifteen times faster than the average annual salary. The astonishing growth has meant that many first-time buyers are unable to purchase property in the capital – and that many London dwellers are being forced to rent instead.

Investment Properties in London Dropping in Price

However, it seems that London’s spiralling house prices are now set to drop, for the first time in several years. A recent study revealed that four in ten properties listed for sale in the Earl’s Court area have since cut their prices since first coming to market. Likewise, 35% of properties for sale in Chelsea and Knightsbridge have also been reduced in price, and close to 30% of sellers in Fulham and Hammersmith have also been forced to lower their prices too.

Whilst this isn’t such welcome news for people trying to sell houses in the city, it’s great news for property investors – especially given that demand for rented accommodation in London remains so high.

Should You Invest in London?

Many people investing in property in the UK have deliberately avoided London, due to its prohibitively high asking prices. However, average rental yields are also substantially higher in the capital, which goes some way to counter-balancing the initial investment.

Additionally, reduced prices are now luring investors back to London – and judging by levels of interest in the current market, now seems like a shrewd time to seek out buy-to-let properties for sale.

Wiser Property Investment

To ensure a great return on your investment, here’s a few suggestions to help you.

  • Identify a specific target area. Find out which areas offer the best rental yields in the capital, then try to locate the areas where cheaper properties can be found. Keep a firm eye on net profit – and target areas where your margins are likely to be highest. If you’re not sure, ask a property investment agent in London.

 

  • Keep capital growth in mind. Remember, your property won’t just be earning an income from rent, it will also (hopefully) make money in capital growth. Look for up-and-coming areas, where it’s likely property prices will rise in the future. For example, locations along the new Elizabeth Line look set to increase in value fairly rapidly in the next few years.

 

  • Choose a target market. Keep in mind who you’re targeting, and which demographic will generate you the most rental returns. HMO properties for students and young professionals are particularly good at maximising ROI.

 

  • Attend a house auction. Buying a house at auction is a great way to secure a bargain, and generally speaking, you can expect to save around 15% on the average market price. However, if you’re buying at a property auction, make sure you know what the process involves – as there are major differences between auctions and traditional estate agency sales.

 

The Buy2Let Shop in Bromley

If you’re looking for investment properties in London, and you want help locating a great house at an appealing price, talk to The Buy2Let Shop today. We’re a team of property investment agents in London, and we’re here to help you find the right house, within your budget. We also offer assistance with buying a house at auction, and regularly hold property seminars to bring your knowledge of the market up to date.

To find out more, simply visit The Buy2Let Shop website.

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