London has long been considered a great place to invest in property.
While house prices have remained relatively flat over the last couple of years, wage growth has increased in the capital, making it around 10% cheaper to buy a property, opening up opportunities for homebuyers and property investors alike.
With more affordable house prices and increasing demand for rental properties, 2020 is expected to be an especially great time to buy or invest in property in London. As always, there are specific property hotspots to keep on your radar. Here, the Portico property experts have listed the best places to buy property in London in 2020.
Note: While house prices are currently stable, former Prime Minister, Tony Blair’s recent housing report states that we will see a 26% rise in prices by 2030 if the Conservatives carry out their manifesto proposals - great news for investors looking to benefit from capital growth.
1. Barking & Dagenham
Current average property price: £318,527*
Current rental yield: 5.4%**
Top yields of 6.7% can be found on Yarnton way in Thamesmead, leading to Crossness Sewage Works; 5.8% around Upney station.
Reasons to invest here: Barking & Dagenham, extending from Rush Green in the east to Barking in the west, offers properties with great value and high rental yields. In east London, this borough has boasted the largest house price growth across the capital in the past five years at 51%. With its easy access to central London through the District line, Barking & Dagenham is an attractive location for homebuyers, investors and tenants alike. And further investment is coming to the area with planning permission having been secured for up to 10,800 new homes and shopping, community, leisure and healthcare facilities at Barking Riverside. A new rail link is also being constructed to better connect the borough, which is likely to bring additional investment and development.
Current average property price: £445,425*
Current rental yield: 4.9%**
The East Ham area offers the highest average rental yields in Newham at 5.5%, with the specific locale of Wall End in East Ham sitting at 5.8%.
Reasons to invest here: North of the River Thames, Newham is another east London borough that has seen significant growth in property prices (49%) over the last five years. The borough also boasts lucrative yields above London’s typical average. A large part of this growth is down to Newham’s population having increased by more than 80,000 since 2005. With Stratford’s Olympic Park and London Stadium within the borough, the 2012 Olympics originally put Newham on the map, and the borough has seen significant growth and regeneration ever since. Newham has also become a cultural hub and new jobs and exciting developments keep coming to the area.
3. Tower Hamlets
Current average property price: £545,550*
Current rental yield: 4%**
Stepney Green offers the borough’s highest rental yield at 4.4%, with Mile End just behind at 4.3%.
Reasons to invest here: Though slightly more expensive than nearby Newham, Tower Hamlets - encompassing Whitechapel, Poplar and Canary Wharf - is definitely a London hotspot to have on your radar. Home to one of the most varied demographics, the borough offers a wide range of properties, and a significant number of tall buildings are in the pipeline. Prime areas such as Canary Wharf push up the average property price, though there are more affordable options popular with younger families in the east end. On top of this, the borough is investing in its transport links and creating better cyclable and walkable sections, making it a more connected place.
Current average property price: £488,632*
Current rental yield: 5%**
The most expensive area within Redbridge was Woodford Wells (£709,631) and the cheapest was Little Heath (£294,333). The area’s highest rental yields can be found in Chadwell Heath (5.5%).
Reasons to invest here: In Redbridge, house price growth is expected to outpace other London boroughs by 17% over the next five years, according to Homes & Property. Despite already being a well-connected commuter area, further rail improvements with the new Elizabeth Line, which will stretch over 60 miles from Reading and Heathrow to Shenfield and Abbey Wood. This will continue to improve Redbridge and boost the local property market. As a leafy suburb, approximately a quarter of the borough is covered by green areas, award-winning parks, and forest, making it an especially liveable part of London. The borough is also known for its top schools (there are 14 outstanding primary schools in the area according to our latest research), and the area’s home to the third highest proportion of children in the UK too, making it one of the most family-friendly boroughs in greater London.
Related: Ofsted outstanding primary schools: complete list and house price guide 2019
Current average property price:£392,031*
Current rental yield: 4.9%**
Reasons to invest here: Another east London borough, Havering has become a hub for start-ups and expanding businesses in a variety of sectors, such as logistics, engineering and manufacturing. Crossrail is coming to Havering with three Elizabeth Line stations running east to west from Romford to Harold Wood, and the borough’s roads have been updated for better traffic flow, while access to buses have been improved too. On top of that, 3,500 new homes are set to be built across 12 development sites as more employment opportunities open in Havering. A significant amount of regeneration is coming to the riverside area of the borough, making it a top London hotspot to invest in.
Current average property price: £421,226*
Current rental yield: 5.5%**
Reasons to invest here: Ilford is being upgraded to a Crossrail hub, which is transforming the area into a top commuter location and spurring regeneration. Set to undergo a major rebuild during 2020, Ilford Station will be connected to the Elizabeth Line, and there’ll be a train every five minutes into central London during peak times, which will further improve the borough’s connectivity. With 2,000 new homes being delivered by 2021, Ilford’s first skyscraper is even in the works. With all of this development and regeneration, the average property price in Ilford has increased by nearly 60% in the past five years. However, prices are still some of the lowest in the capital, offering great investment opportunities for first-time buyers and investors.
View properties for sale in Ilford.
Current average property price: £497,758*
Current rental yield: 4.7%**
Reasons to invest here: Hounslow offers larger sized homes for lower prices and has access to highly rated schools and green space, making it an attractive location for many families. Spanning a large part of west London, Hounslow is located under the flight path for Heathrow's two runways. This is likely why the prices are more affordable in this area, but this also makes it well connected for those who travel often. On top of that, a half million-pound revamp of the Civic Centre and Lampton Road and regeneration of the Hounslow High Street is making the borough an enticing place to live and invest in.
Current average property price: £387,286*
Current rental yield: 4.4%**
Reasons to invest here: As one of the most affordable areas in the capital, Sutton is located in the southern part of Greater London. The borough has seen more than £410m invested since 2012, and more investment and development opportunities are expected to further unlock economic growth as Sutton is home to more than 6,800 businesses. In Zone 5, the borough boasts proximity to central London, while being on the doorstep of Surrey countryside. Sutton’s small district centres have even retained a village feel not often present in Greater London, making it a very attractive place to live, work and invest in.
Give us a call on 0207 099 4000 if you’re planning on buying in London and our experienced property experts can ensure you make a viable investment. Alternatively, get an up to date rental or sales valuation on your property in just 60 seconds with our !!!instant valuation tool. Use our !!interactive rental yield map to the right to get an indication of potential rental income at the click of a mouse.
*Rightmove data correct as of 16.12.2019 https://www.rightmove.co.uk/
**Portico rental yield map data correct as of 16.12.2019 https://www.portico.com/yields