London stands alone as a property market in the UK. A transient Place where people from all over the world come to work, study and live. This gives the London Property Market a unique status as one of the world most expensive places to live. An average house prices is nearly £500k and a 1 bed flat is close to £200k, compare that to the national average house price of £240k and you can see why London can be an expensive place to live.
But London Property Development can be very fruitful, even if rents compared to the rest of the UK seem to offer a lower yeild. High demand from UK and overseas buyers ensures that properties enjoy more of a rapid growth in capital than the rest of the country.
What should I look for when looking to invest in London?
London is always changing. I remember 20 years ago areas such as Putney and Notting Hill where still considered rough and not very fashionalble palces to live. Now, of course they’ve become highly fashionable and many small time developers have become rich on the back of the growth in popularity of these areas.
This is happening all the time in London. As soon as an area becomes too expensive to live it has a ‘knock on’ effect to the surrounding areas. A good indicator of this is when you start to see other developer move into an area – check out for roads with plenty of skips and builders vans in. Another key indicator is the emergence of National estate agents. Now every area will have local estate agents, but you’ll know if an area is rising in popularity because the big national agents will move in. National London agents like foxtons and John D Wood.
Make a note of the unpopular streets. Perhaps they have busy traffic or industrial works opposite. These streets coudl still be a good investment if you target the right market like professional couples. Also look for streets that are a little further away form a tube or train station. Again, these areas tend to be unpopular with traditional buyers but could still make a good investment.
Even if you think an area or road is unfashionable right now, if it’s gaining popularity then with an increase in development activity then you’ll be coming at the right time.
Obviously, it’s far less risky to invest in an area that has already seen growth in popularity and investing in this way does take out any risk but your gains will be less.
Where can I find a London Property Development?
Many London Property developments are sold quickly though one of the many London auction houses however I would always advice taking to the streets to discover a new road. London is impossible to research via Google maps you have to be there to see whats going on. Look for empty homes (there’s more in London that anywhere else in the country). Register with local agents if you’ve found an up and coming area but be aware you’re unlikely to find a below market property with London Agents as their commission is based on selling at the highest price, but there are occassions when a development opportunity comes along – just be prepared for a lot of competition.
The propblems of developing a property in London
Developing property comes with more challenges that working outside. The ‘congession’ charge and parking limitations make finding tradesmen harder and it also means skips and other services are a lot more expensive. Planning regulations are more restrictive as most properties have already been developed to their maximum potential in terms of space.
That said there are plenty of tired properties in London if you can find the right area and manage your costs you can turn a profit.