London has remained a popular destination for overseas investors. As a global city and trading hub, overseas investors have always found London a reliable destination to park their capital for long-term growth. While there have been some mix signals about the future of the London property market following Brexit, we believe that London will continue to remain at attractive destination for overseas investors looking for a long-term investment.
Over the past decade, London property prices have increased steadily increased and this has impacted rental yields. While this has deterred many investors, we believe there remains good investment opportunities. Some of the key factors we often emphasise to investors when looking for good investment opportunities include:
- Below Market Investment: While it is often hard to find, securing properties below market value are critical for property investors and provide a good hedge against market fluctuations, and can prove beneficial in the financing process. We have discussed how investors can go about sourcing below-market investment opportunities here.
- Value-Adding Angle: As property investors, it is important to enhance the value of the property that you purchase, which would increase its market value and returns/yields that can be extracted. This can be done in many ways, from a simple refurbishment to freshen the image of the property to heavier refurbishment that could include increasing the total liveable space (e.g. loft conversion, rear/side extension).
- Good Transportation Connectivity: While some investors are cautious about venturing beyond the familiar (and highly prized) Zone 1 locations within London, there are plenty of good (and more affordable) opportunities in other Greater London boroughs. These locations often offer bigger properties with some external garden space, key factors for home buyers or tenants in the new work-from-home normal. However, the critical factor of connectivity does not change, and finding a place within close proximity to a tube or train station remains essential.
- Proximity to Good Schools: Similar to the point above, proximity to good schools can be a huge benefit and provide a premium rental yield. Moreover, tenants are unlikely to move as frequently once they find a place close to a good school for their children, offering longer leases and greater rental stability.