London property trends and hotspots in 2018

London property investors, on average, own four or more properties with a portfolio value of £2.2m according to research by banking group Barclays. The same research showed that 79% of buy-to-let landlords plan to add one or more properties to their portfolio within the next five years. So what trends can property investors expect to see leading up to 2020?

Significant growth to come

Based on strong rental yields and price growth, Barclays predicts significant growth in four London locations before 2021. House prices in Wandsworth, south London, are expected to rise by 31.1%; in Westminster the rise is predicted to be 31.9%; in Camden the rise is predicted to be 33.9%; and Richmond Upon Thames, unsurprisingly, came out top with an expected price rise of 39.1%.

Conflicting research by audit and tax advisory group KPMG though, shows Richmond Upon Thames bottom of the rankings for property price growth (1.5%) behind the 32 other London boroughs; including Camden at 3.18%, Wandsworth at 3.73% and Westminster at 4.27%. KPMG is looking east for its predictions of property hotspots with Hackney in particular is expected to see growth of 5.31%.

Data: KPMG 

How will Brexit affect property prices?

Both reports are an example of tentative predictions of price rises in the next five years. Countrywide’s chief economist, Fionnuala Earley writing for Homes and Property, offers a conservative prediction of rises of 2% in 2018 and 3% in 2019.  It is clear that commentators are reluctant to expect too much in the wake of the Brexit negotiations.

City AM goes one step further however, suggesting that Brexit could result in a short-term dip in prices as boroughs with a high concentration of EU nationals witness an exodus. The KPMG research notes the same: “For example, French and Italian nationals make up [Kensington and Chelsea’s] residents… Given its attractiveness to non-EU migrants – Americans are the largest migrant population by country of birth – it is possible that a departure of EU citizens from the borough would be compensated to some degree by stronger demand from other nationals. However, this would be contingent on the British government not imposing tighter overall migration restrictions post-Brexit.” All eyes are on the progress of Brexit in relation to the housing market.

Renting offers convenience and flexibility

Other trends too are emerging. Tenancies are getting longer, especially at the top end of the market with more 35-45-year-olds opting for the convenience of renting. While this is good news for landlords, this discerning group expect more from their rentals including quality, space and amenities so landlords will need to keep their properties in premium condition.

Read our top 10 tips on furnishing to maximise your property investment

These are all significant factors that property investors should bear in mind, especially if they are considering adding to their portfolio in the next five years. If you would like any advice in meeting your property investment goals in areas that are likely to experience good price growth, or to receive a free rental valuation, then please get in contact today. The team is always happy to help.

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