Investing In a London Property Is the Biggest Mistake You Could Make | The Heaton Group

You might be reading this while thinking about investing in property. You may even be contemplating your first foray into the property market. Well, the honest truth about property investment is that it’s a broad market full of diverse investment opportunities and this can easily be forgotten by first-time investors. 

What can’t be forgotten, when choosing a property to invest in, is the location. It can be tempting to just go with what you know - or think you know - about a property, in terms of picking a location to find your next investment opportunity. Let’s be honest, you’re not going to scour the length and breadth of the UK to find the perfect property - you’ll start with a location and find a property to suit. 

So, let’s talk about the elephant in the room when discussing property location - London.

What do you think you might benefit from when investing in a London property? Is it a more stable investment choice than other areas? Will you see higher returns?

You might have a good feeling about London because of its name and familiarity but a sound investment isn’t made on a hunch, it’s made on facts and figures. So, let's look at the figures that tell us why investing in a London property is the biggest mistake you could make. 

1. Lower Entry Prices in Regions

Lower Entry Prices

It’s safe to say, one of the aspects you will probably side with us over, when we tell you to avoid London, is the prices that come with buying a property there. 

The simple fact that London is the Capital of England means that property prices are going to be higher than in other areas of the country. This is nothing new and its something that has boxed many property investors out of getting involved in the Big Smoke.

The problem with a high purchase price, when it comes to your investment, is that you are less likely to see the immediate returns on your investment that you might have hoped for. Your rental price might be higher in London than in other areas of the country but, if your investment is higher, your monthly ROI might be lower than you expected.

If you can find an area of the country that demands high rental prices from your tenants with a low entry price for yourself, you know you’re onto a good property investment.

Download your free eBook - How to invest in property the hard way

2. Growing Regions Offer Greater Returns

Other Regions Greater Returns

Expanding on the last point, you should be looking to find an area that offers you the best rental yield based on investment and rental return. Let’s look at this...

We’ve been banging the drum of regional property investments for years - and for good reason. Some of the best investments around are in towns like Chorley, which is why we’ve been having a major hand in the development of these areas. 

Taking Chorley as an example, with £17 million to be invested into the town centre, the region on the cusp of drastic change. With its town centre being one of the few in the UK to have increasing footfall and, with these approved investment plans, Chorley will go from strength to strength.

Chorley is just one example of what we’re talking about. If you choose to invest in London, you’re missing out on becoming a part of this amazing regional growth and taking advantage of all the benefits this has to offer.

Misconceptions around these regions that you’ll have to invest in a run down property. This couldn’t be further from the truth. Due to the massive growth in these areas and the demand for high-quality accommodation, more and more luxury properties are being built to ensure your investment away from London, and other major cities, doesn’t need to seem like a downgrade.

Don’t miss out on the regional movement that many investors are catching onto.

Related: 5 Upcoming North West Buy to Let Yields By Postcode

3. The Downward Trend of London Property

Downward Trend of London

It’s no secret that the property investment scene in London has had better days and getting involved in this market is no longer as appealing as it once was.

Despite mentioning the high prices of London, the area has actually seen a consistent decline in property prices over the last few years. This might sound like music to the ears of soon-to-be property investors, who can buy cheap and wait for the market to uptake, but, in reality, the market in London doesn’t show any signs of improving soon.

To counter this, UK regions such as the West Midlands, Yorkshire & Humber and the North West saw property growth over the same period. With lower rental yields and the falling value of property in London, there seems to be no better time to invest away from the capital than now. 

Don’t ignore the figures. There are better growth opportunities away from London, so why on earth would you stick with the capital when the numbers don’t add up?

4. Other Cities Offer Amazing Opportunities

Cities Offer Amazing Opportunities

If you’re set on investing in a city, for whatever reason, we’d recommend you take a look around some of the UK’s other major cities, like Manchester and Liverpool, before opting for London by default.

This type of investment, in other major UK cities, makes complete financial sense. With a high demand for rental accommodation but a lower purchase price than in London, cities like Manchester are best-placed to become investment hotspots.

15,000 new homes are set to be built in Manchester over the next 15-20 years which is evidence of the ever-increasing demand for housing in the city. There has been a drastic increase in the number of people living in the city over the last 20 years - from around 10,000 to 70,000 and here lies your opportunity to invest in an affordable property that offers consistent rental returns.

There are so many reasons why you might regret investing in London and missing out on the chance to get involved in the UK’s other major cities is one of the biggest.

Related: 6 Reasons a Preston Property Should be Your Next Investment

 

Don’t be tempted by London, base your investment decision on facts rather than on name alone. You might find that the best options for you lie in regions you’d never have thought about.

Visit our contact page and you can request a callback from one of our property investment experts. If you’d rather learn a little more about property investment first, download our free eBook, How to Invest in Property the Easy Way: Strategies For Success and What to Avoid.

Download your free eBook - How to invest in property the hard way