Prime Real Estate: Where to Invest in London Property

London has long been one of the most popular areas to buy property in the UK, but it’s also one of the most expensive, so knowing where to invest your money for the best yield and return on investment can be tricky. There are so many fantastic areas in the city to choose from and there are numerous styles of property to be found here, which creates a number of property markets to navigate, especially when you’re investing in a buy-to-let.

Buy-to-let in London is still so enticing for property investors, with the strong demand for properties here and the fact that private renters account for around 30% of all London households, according to a study by CBRE. With this in mind, these are some of the prime locations for investing in London property.

What should investors consider before buying?

Location plays a big part in where you invest in property, but it’s not the only factor that can influence the bottom line. When you’re choosing a property to let, there are a few considerations to make to ensure you don’t negatively impact your future income.

Quieter areas, set back from main roads, tend to be more appealing for tenants and these properties also tend to hold their value for longer. It’s also important to consider the future of the area and the property - are there developments planned and is there scope to extend the property itself?

Tenants often want to be close to the main attractions and transport links, so what is the culture and nightlife like in the area you’re viewing? The closer your property is to these attractions, the higher the yield is likely to be, but this could also impact the property price too. Close proximity to schools is also important for renters and could help to retain their value if you’re letting to families.

Central London

London has a rich history and that’s a big part of its appeal for people looking to move there. Central London, in particular, is packed with original buildings and historic spaces. Areas such as Fitzrovia are largely residential and there’s a mix of townhouses and apartments, surrounding charming courtyard spaces and terraces for residents to enjoy. Buy-to-let investors who want to go contemporary also have their pick of modern developments here, which have cropped up in recent years.

The closeness to the likes of  Mayfair, Covent Garden, Soho and Marylebone make Fitzrovia an appealing choice for London residents, particularly with professionals working in the media industry. However, it’s also one of the city’s more expensive areas, so yields can be lower than elsewhere in London. But since it’s one of the most sought-after areas for residents, investors with a larger budget may want to consider it as a potential investment spot.

East London

East London is a commercial hub, with many financial, legal and media corporations based here, so it’s a popular area for professionals who work in the area. It also boasts some of the best transport connections in the city, with Underground and Overground lines, extensive bus routes and the DLR.

With properties in East London typically on the cheaper end of the scale, this part of London offers particularly strong yields. While the inner districts tend to be more expensive, there are still areas that offer significant return on investment, such as Canary Wharf and Poplar. On the outskirts of East London, the likes of Romford, Dagenham and Ilford are particularly affordable and deliver higher rental incomes.

North London

North London is widely considered to be a great choice for investment, with fantastic transport links, amenities, plenty of wide open spaces and a great range of property styles to choose from. In terms of investment opportunities, North London offers some great locations. Edmonton and Hampsted, for example, deliver strong rental yields.

North London has some of the most desirable residential suburbs, so it can be a great location to invest in in terms of attracting tenants and filling properties. However, bear in mind that some of the inner areas have grown in popularity in recent years, such as Notting Hill, making them more expensive. For better value, areas such as Finchley and Willesden are a better choice for cost-efficiency.

South London

South London is a unique area in that it has two opposing markets. South-West London is a commuter area, so areas such as Wimbledon and Richmond provide lower yields, whereas South-East London may be considered less fashionable but they are often described as up-and-coming and the prices are much lower, so returns are higher. Look to areas such as Bromley and Streatham for better value. The latter has a mixture of properties, from Victorian family homes to converted flats, and there’s a great selection of amenities here from the high street to Streatham Common.

In summary

London is a desirable location for investment but it’s also vast, and there are many areas to choose from before you make your final decision. From who your target market is to the budget you have available and whether you want to choose an area that’s already in demand or go for an up and coming area, there are various considerations to make before investing in a London property.