For some investors, price is all that matters. They will
voraciously snap up anything, anywhere and in any
1. Public transport
Unlike South Africa, car ownership in London is a
Decide where to buy
Location, location, location – it may be a cliché,
but understanding where to buy your first London
investment property is of paramount importance.
London’s property market is like no other in the world.
It moves faster and differs vastly from street to street,
let alone area to area. There isn’t just one housing
market, but myriad ones, responding to a variety of
specific factors, from factory and office closures to the
pulling power of local schools.
2. Public amenities
This point seems so obvious that it’s often overlooked.
Another consequence of few Londoners owning
cars is that people don’t necessarily do bulk monthly
shopping for groceries – it’s a pain to lug it all back
home on the bus or Tube.
A local housing market may be made up of
commuters working in the city or those working for
local companies or the government. There may be a
demand for housing from students, their tutors and
professors, or even short-term corporate tenancies
for jet-setting consultants. All of these may find their
rental property within a small area, with certain types
of property more in demand than others. From one
street to the next, demand may vary from studio flats
through terraced houses to executive apartments.
easy access to shops, restaurants and bars, so ensure
that these are close by.
condition, as long as it is cheap. Others are prepared
to pay that little extra, and to cherry-pick deals from
new developments in up-and-coming areas. There is
undoubtedly a market for both of these approaches.
Be sure to stick to your strategy, however. Too often
I see investors, who are not clear on what investment
strategy they want to follow, running all over London,
looking at 100 completely different opportunities
in completely different areas, only to return home
confused, empty-handed and disappointed.
The local market will directly affect the type of
tenant you attract, your rental return and the level
of capital appreciation you can expect, so it could be
argued that it’s the most important element to get
right. There are many tips and tricks you can employ
to find the right location for your London investment.
But in the end, it all boils down to four fundamentals.
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luxury for most. The vast majority of Londoners rely
on the public transport system to get around. Because
of this, people have a tendency to congregate around
areas with good transport links. They are willing to
pay a premium to be within walking distance from
a station. If you want to ensure that your London
property appeals to a large market of potential tenants,
and that it will benefit from good capital growth, it is
essential that you invest in an area with good public
transport.
It’s far more common for the average Londoner to
pop into a shop on their way home from work and
pick up a few items for dinner, to pick up a take-away,
or just to eat in a restaurant. Your tenants will want
Keep in mind, however, that if your local rental
pool consists of mainly families, they will shun noisy
high streets and bars in favour of parks, libraries and
leisure centres.
3. Education
This is particularly important if the area has a high
concentration of families. In London, competition is
fierce for places in the best public and private schools.
Parents will go to great lengths to ensure that their
children get into well-regarded schools, often paying
ridiculous amounts of money for properties in the
right catchment area. Some even resort to renting a
home for the time their children are at school, despite
owning their own property elsewhere.
Offshore Handbook 2013
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