Real Estate Knowledge

It’s 2021: Where Can You Invest in the London Property Market?

  • The mortgage approval rate is up 827% since last year.
  • Stamp duty has been waived – saving buyers up to £ 15,000
  • Retail investment is up £290m in 1 month

The UK offers relative stability and transparency, with London at the core of it’s market as one of the major metro areas of the world.

A hub for overseas property investment, the demand foreign buyers have been responsible for as much as a 20% increase in prices. The city is home to millions of immigrants and is often the primary choice of investors due to its geographically convenient location and growing scope of opportunities.

Stamp duty has been waived for the bulk of 2021, releasing the pent up demand from Covid.

A quick history…

Pre-pandemic, Prime Central London (PCL) prices suffered due to “higher rates of stamp duty and political uncertainty,” cites a 2019 Knight Frank report, pushing the average price for existing homes below their 5-year average.

Property in popular neighbourhoods fell up to £200/sq foot below average: Hyde Park, St John’s Wood, Chelsea, South Kensington, Kensington, Belgravia, Knightsbridge and Mayfair in PCL ranged between £1,000 to less than £2,000/sq foot.

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Covid-19 made an immediate, obvious impact throughout 2020, with an initial crash followed by volatility, spurred by quarantine and mass uncertainty. However, in March of this year – 2021 – property transactions were the highest in a decade in Prime Central London. In other words, the property market was at its most active in the last 5 years.

Price growth began at the beginning of 2021, and demand will continue to grow as travel eases, vaccines take effect, and investors realize the opportunity to break in before supply is snatched up at a premium.

This image has an empty alt attribute; its file name is London-house-prices-map-1-1024x612.png
London remains a strong investment location for capital appreciation assets. 

The demand for properties in the city still grows, and investors are encouraged to view it broken down in the 5 main areas mentioned below:

  • Central London
    • West End, Covent Garden, South Bank, London Bridge, Chinatown, City of London;
  • North London
    • Barnet, Enfield, and Haringey;
  • South London
    • Bromley, Croydon, Kingston upon Thames, Merton, Sutton, and Wandsworth;
  • East London
    • Collondale, Saxilby, Brookville;
  • West London
    • Popular neighbourhoods: South Kensington, Notting Hill, Fulham, Hammersmith, Shepherd’s Bush, Kew, Twickenham;

As far as investment goes, suggests the following areas in terms of pricing, transportation, environment and other factors that are to be considered pre-purchase:

  1. Barking and Dagenham
  2. Havering
  3. Leyton
  4. Battersea
  5. Bloomsbury

They also have this article on organizing a home move to London.

A large construction project in Battersea, London.

Wile London is on track to recover from its a recent turbulent timeline, smaller metro areas and submarkets are increasingly being viewed by investors for their higher yields, watch our quick video on that here.

For more information on London, there are easily accessible market reports from the London Datastore – a public database – here.

This just the beginning of the conversation

At Denzity, we publish personal finance and investment articles for the young professional. If you have any questions and comments, write them below or reach out to our team here. Stay tuned for more investor focused content, financial advice, and industry updates.