It is never easy to make predictions, as inherently they are based on calculated risks and uncertain figures. And the difficulty of making a prediction is accentuated in the property market, where a confluence of factors impact on whether house prices rise or fall. However, two of the leading property experts, Rightmove and Savills, have recently laid all of their cards on the table, predicting property prices are only going one way. Upwards.
Over the last few years, London has undoubtedly been the epicentre of the housing boom, with first time buyers struggling to get on the ladder due to the inflated figures. But according to Rightmove this increase is about to become spread among all of the South of England. Their report contends that by 2019 house prices will increase by 33% in the capital, whereas the commuting towns of Southampton, Luton and Brighton will expect house price increase in the forty per cents.
Known as the “spillover” effect, London’s recent leap in house prices will have a knock on effect in the Home Counties and peripheral towns. This will only reinforce the North South England divide, with growth in Manchester expected to be lower than 20%. But what does this mean for property investors? Is London still a viable option or should one look further afield?
A report by Savills would suggest that London is still the place to invest in property development. It predicts a price growth of 13.6% in well-off parts of west London, and it names Enfield in north London – until now one of the cheapest property areas in the capital – as the borough that will see the biggest gains. Average prices in Enfield will rise from £381,000 to £531,000, a huge increase of 39%.
The unprecedented rental growth in the capital over the last 10 years does not look to abate as more and more people struggle to buy their first home. This may be bad news for people wanting to join the property ladder, but can only be good news for commercial property investors. In 2014 the average London house price grew by 19%, now standing at a mouth-watering £514,000.
It’s not all about pricing though, with subtle changes noticeable in where property moguls are buying. Property investors are being far less postcode-snobbish than in the past, with investment in forgotten parts of London a popular tactic. North London studios and apartments are being snapped up like never before by renters, none more so than Cartlone’s very own Finchley Road studios, which are now for sale to the right property investor!
So where should the canny buyer invest? Some areas already identified as up and coming include the Battersea Power Station, which has obvious investment potential. Whilst other up-and-coming corners of the capital may be excellent areas to invest, including Hackney, Haringey, Kentish Town, Willesden Green and more!
There is always something to buy, it just depends on the price, funds available and whether you’re a risk taker! This is the tricky part. Therefore if you’re new to the industry, check out Carltone’s 10 key buying tips below:
- Research the local area, schools, hospital, shopping facilities and amenities nearby
- Who is the target market? Consider the distance from local transport links
- Calculate and compare the price per square foot of the asking price with other buildings nearby. Is the property undervalued or overpriced?
- Visit the property in person and ask as many questions as possible
- What is the condition of the external building?
- What is the condition of the internal building (check windows, doors, wall joining, cracks and check for damp!)
- Consider how much work needs to be done to the property and calculate the cost of these renovations
- Hire professionals to check the building and planning restrictions (if you don’t know something, find out before you buy!)
- Assess a number of properties at the same time to insure you get maximum value for money
- Be aware of market trends, looking for areas with potential for an increase in property prices over the next 5-10 years
Alternatively, if you’re interested in getting involved in the property industry or would like to partner up with us on a new lucrative development, contact us now! We’d be glad to help you find a luxury property development in London.