For many years investing in bricks and mortar has been an almost sure-fire way to increase regular income and grow capital. Those who’ve invested in long term assets have benefited from very low interest rates and steadily rising house prices.
And London has always been an attractive market for property investment, with a constant supply of both renters and buyers looking to move to the capital meaning excellent rental potential and fierce competition for properties which are put up for sale.
But with a more volatile housing market due to interest rate rises and cost of living pressures is now still a good time to invest in property?
Expert Jonathan Rolande, founder of property company House Buy Fast, said: “Investing in property in London can still offer huge benefits, but there are also significant challenges which shouldn’t be underestimated.”
Offering his advice he says:
Capitalise on falling prices. After decades of stratospheric rises in house prices in the capital, 2024 is reported to see a four percent fall in real prices. This means there may be bargains to be had as higher interest rates force those leveraged to the maximum to offload their houses at sensible prices. Many experts predict the fall to be a blip so now could be the to make your move. Just remember – with property, there are no guarantees.
Lower interest rates: Interest rates are expected to remain around 5.25% for much of 2024 with lower rates to follow. This means a buy-to-let mortgage may get more affordable and rental yields look set to improve.
Focus on renting: Online property giant Rightmove reported the London property market saw a remarkable 12% year-on-year increase in rents. This near-vertical trajectory shows no signs of stopping in 2024 as demand continues to massively outstrip supply, making an exceptional time for landlords and those looking to become landlords.
Redevelopment: London is constantly reinventing itself, and areas which were a bit undesirable last year are next year’s “most desirable” corners of the capital. Nine Elms, Wembley, and Hayes are currently undergoing substantial regeneration, and money is pouring in from both developers and investors. The improvements in infrastructure and local amenities will significantly increase both rental demand and house prices.
Hedge against inflation: Long-term property investment has long been considered a gilt-edged hedge against inflation. As the cost of living rises, so do rental incomes and property values. While turning a quick buck on the London property market is a much riskier proposition than in previous years, those in it for the long haul are unlikely to be disappointed. The average London property has risen almost 250% since 2000. That said, the usual caveat applies – past performance isn’t always an indicator of future outcomes!
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