The London property market has more moving parts than a Rolex watch —and it’s not nearly as reliable.
If you invest in property here you’re entering one of the most highly-competitive marketplaces in the world.
And selecting the right location isn’t the only factor to compute in this complex game of chess.
So here are four twists and turns to provide pause for thought before making a capital purchase.
The London house price bubble might not have burst but it’s certainly deflating.
Annual house price growth dropped from five per cent to 1.2 per cent in the last quarter — contrasted with a nationwide rise of 2.8 per cent.
The changes could reflect the fact that many Londoners are priced out of the property market and high stamp duty prices mean there’s less demand for buy-to-let properties.
But remember that house prices in the rest of the nation have only grown 13 per cent since the 2007 crash, whereas London prices are still 56 per cent higher than at that time.
London has always been a city where purchasing in the right location is prioritized.
But gentrification means that more areas of London are desirable — so investors are focusing more on properties with the most desirable features than the location itself.
Potential purchasers who would have set their sights on a swanky Chelsea flat are now snapping up properties in traditionally less desirable locales like Battersea and Brixton.
And in Hackney – once snubbed because of crime and deprivation – prices have risen by more than eight times in two decades.
London Mayor Sadiq Khan recently conducted research revealing that foreign buyers purchased 3600 of 28000 homes built in London between 2014 and 2016.
And because many of these were priced in the first-time buyer bracket, it’s claimed this trend is squeezing locals out of the market.
Some homes are bought for the buy-to-let market, but housing campaigners argue others are permanently unoccupied, existing as ghost homes or empty investment units.
While it’s common for high-end properties to be owned by overseas investors, over half of all units costing £500,000 or less were bought by overseas buyers.
This might mean many first-time buyers are forced to forget about a London home for the foreseeable future.
The commercial property market in Central London remains buoyant, with stable rents and many investors ready to snap up properties as soon as they’re available.
Total take-up is 19 per cent up from last year — with tech and media firms accounting for 20 per cent of the market.
But some of the most profitable retail locations are in areas like Romford and Hendon, which have benefited from regeneration.
Retail investors looking for shops to rent in London can check out an online registry like Shop Property to streamline their search.
If you can navigate the twists and turns of the London property market you might be in pole position to build a premium portfolio.
Where would you invest in London? Share your advice in the comments section.