What to look for when investing in London off-plan property

Seven tips to locate the best investment property opportunities in the capital

London off-plan property is receiving some stick in the press. London property prices are falling, and the apartment market is in fear of becoming saturated, we’re told. Savvy investors understand that such situations are both temporary and that property investors should never believe all they read in the newspaper.

Sure, after several years of overperformance, London property prices are not increasing at the rate they have been. Some London areas are experiencing what I would call a healthy slowdown – the next leg in the property and economic trend cycle.

London is a major world city. It’s benefiting from huge infrastructure and regeneration investment. Its population is forecast to grow strongly over the next 20 years. Despite the best efforts of central government and local borough authorities, housing supply is unlikely to keep pace with demand. To find the best places to invest in London off-plan property, here are seven factors to look for.

1.      High population growth that supports property investment

The Office of National Statistics expects London’s population to grow to almost 10 million by 2024. That’s the fastest growth in the country. Tower Hamlets is forecast to be the fastest-growing of London’s boroughs. Here the population is expected to increase by more than a quarter by 2024.

After Tower Hamlets, highest population growth is expected in the east of London, with Barking and Dagenham, Newham, Camden, Islington and Redbridge among the country’s fastest-growing local populations.

Population growth supports inward investment, regeneration, infrastructure spending, and, of course, demand for homes.

2.      Retail and relaxation

A couple of weeks ago, I wrote about the supermarket effect on investment property prices. Lloyds Bank research has found what property investors have known for years: properties located near to supermarkets are priced higher and have better investment potential. People want the convenience of living near to shops.

They also want to live near recreational amenities such as bars, restaurants, cinemas, gyms, and outside spaces where residents can walk, jog, and walk their dogs.

3.      Educational facilities

Young couples and families want to live in the catchment area of the best schools, and London has some of the best in the country. An area that offers Ofsted-ranked ‘good’ and ‘outstanding’ schools at different age levels will enable a family to grow without moving. It could reduce costly void periods, as well as boost property values.

4.      Public transport links

The capital is ideal for those who want to use public transport rather than own a car. Commuter towns are perfect investment locations to capture the growing demand from people who work in the City but cannot afford to live in central London. All the while, commuter towns also fulfil the desire to live no more than a few minutes’ walk from a train, tube or bus station.

Much regeneration is taking place in town centres in zones 2, 3 and 4 and beyond. Buying off-plan in these parts of London could benefit from the ripple effect that is helping to create a firmer market a little further out from central London.

5.      Property condition

When you invest in London property, pay attention to the condition of the apartment you are buying. Existing property may appear to be a bargain, but if it is going to cost a small fortune to get up to the standard, your profits are going to disappear quickly. When you invest in off-plan property, you’ll benefit from all the mod cons, which tenants love. Your maintenance bill should be lower.

6.      Crime rates

Areas that are being regenerated tend to see their crime rates reduced, but it is still worth checking out what they are before you commit to the investment. People want to feel safe when out and about and walking to and from their local tube station. Some developments also benefit from being gated communities, offering a further level of security and safety.

7.      Invest confidently with a trusted developer

Finally, make sure you invest only with a trusted and experienced developer. You’ll want to see evidence that their previous developments have been completed in time and to the specifications expected.

Make your job easy

We work hard to find investors the best properties in the best locations. Our unique Hotspots Algorithm analyses 108 data points across 324 areas in the UK. It pinpoints the factors that make a location tomorrow’s property hotspot – if you invest in today’s, the best of the capital growth potential has probably passed.

We also work with the best developers in the UK, meaning you can invest in London off-plan property with confidence. To take advantage of our research capability and developer access, contact one of the Gladfish team today on +44 (0)207 923 6100.

Live with passion,

Brett Alegre-Wood

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