Navigating the London Real Estate Landscape: Investment Projections for 2024-2025

Anticipations for 2024-2025 suggest a positive shift in the housing market within inner part of the capital, following an extended period of sluggish growth. According to the UK House Price Index, the medium flat cost in inner city has hovered in the range of £520,000 to £555,000 from January 2016 to January 2023.

Essentially, this means that, in comparison to payment escalations seen in other parts of the country, the market in inner London is approximately 24% more affordable.

While inner city remains a high-cost market, it represents better value compared to more distant ones. Being a prominent global hub, the demand for rental developments in London is consistently high.

Moreover, with salaries generally higher in the capital compared to the rest of the UK, renters in the city are willing to pay a premium. As we move into 2024, we expect prices in inner London to rise given its strong appeal to real estate investors seeking favourable returns on their investments.

Real Estate Market Predictions

2023-2024:

• Housing prices decline;
• By end of 2024, housing costs expected to be around 10% lower, erasing half of pandemic-driven gains;
• Property cost recovery starting from late 2024, contingent on potential mortgage rate cuts.

2025-2026:

• A temporary housing price decline, distinct from the aftermath of the financial crisis;
• Mortgage lenders reduce rates in the next year, base rate drops from mid-2024 due to falling inflation;
• A significant 7% surge in house prices in 2026, indicating a possible recovery and dismissing the likelihood of a UK housing market crash.

The Best Districts To Invest In

Consider Investing In King’s Cross:

Average Accommodation Price: £854,403
Average Rental Yield: 3.72%

Known for its iconic King’s Cross and St Pancras railway stations, this historically significant hub has undergone substantial redevelopment in recent years. The initial stages of their master plan involved converting the iconic Granary into an arts university and repurposing transit sheds into retail spaces.

Approaching the final stages of its redevelopment, King’s Cross has attracted major corporations, notably Google, which has chosen this location for its headquarters. Abundant commercial opportunities and promising employment prospects make it an appealing choice for both buyers and investors.

Not only do overseas investors benefit from the favourable exchange rate, but UK-based investors can also capitalize on the promising King’s Cross property market. The demand for rental properties in London, including King’s Cross, remains consistently high. With the rise in interest rates prompting some landlords to sell, the demand-supply gap continues to widen.

This heightened demand has propelled a substantial 14.2% increase in rental values over the past year, underscoring the potential for significant yields. Additionally, the area's proximity to King’s College London presents a substantial student market, providing an additional avenue for investment.

Reading As One Of The Top Investment Destinations

Average Accommodation Price: £334,745
Average Rental Yield: 4.6%

Looking into 2024, we anticipate a continued upward trend in house prices in Reading. Much like London, home payments have seen a gradual increase in recent years. Notably, between 2022 and 2023, payments exhibited a steady incline.

Being a commuter town, improved transport connections play a pivotal role in Reading's growth. The opening of the Elizabeth Line in 2022, providing direct links to Central London, has significantly contributed to this. Additionally, the upcoming Green Park Station, despite experiencing delays during construction, is slated to commence operations in 2023.

As a favoured location for buy-to-let investments, Reading is poised for sustained growth. With its characteristic affordable residence rates, the city holds the potential for substantial capital growth through rental income.

Tottenham Hale Is Also Here

Average Accommodation Price: £436,872
Average Rental Yield: 4%

Tottenham Hale is currently undergoing extensive regeneration efforts, spearheaded by the joint venture Argent Related, set to yield approximately 2,000 new homes. The development also encompasses new offices, retail outlets, cafés, an upgraded station, and an improved town centre.

The area enjoys the convenience of Victoria line services connecting it to central London. Additionally, the vicinity to the expansive green spaces bordering the River Lea and Walthamstow Wetlands enhances its appeal, making it an attractive prospect for both London-based property investors and prospective homeowners.

Look At Walthamstow Closer

Average Accommodation Price: £555,659
Average Rental Yield: 3.24%

E17 embarked on a transformation journey a while back, triggered by a migration of trendsetting East Londoners seeking more affordable alternatives to Hackney and Stoke Newington in the south. This migration prompted developers to recognize the area's potential, resulting in the integration of modern housing amidst the existing Victorian and Edwardian terraces, facilitating the rapid gentrification of the neighbourhood.

Walthamstow's designation as the London Borough of Culture in 2019 provided an additional boost, further enhancing its popularity. Presently, the area continues its ascent in desirability and is expected to maintain this positive trajectory.