Zoopla’s latest report also offers some interesting insights into the London buy-to-let property market. While some investors used to see London as the go-to place for the most lucrative and stable ventures, in recent years, many have started looking elsewhere for better deals. This was due to the premium price tag on London property, meagre rental yields, and sluggish capital growth.
Many buyers have begun looking towards commuter towns rather than more central areas, but according to Zoopla’s report, London has been avoiding the accelerated price falls seen in the broader South East and surrounding commuter areas. The slow price growth over the last seven years (just 8% compared to the 28% for the rest of the UK) has given London an image of better value for money.
New sales have sprung back in London more than in any other part of the country over the last two months, and in the EC postal area, house prices have been up 0.6% over the past year. This could also be partly due to reduced levels of remote working, making inner-city London more in-demand.
Despite this boost for the property market, it’s doubtful that London property investment will overtake the North when it comes to high-value properties and capital growth. While London has displayed subdued price growth over the last few years, the difference in average property prices is still vast.
According to the UK House Price Index, the average house price in London was £539,074 in August 2023. Compare this to Liverpool, for example, where the average cost is £179,129, and it’s easy to see why many investors are still being drawn elsewhere.
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