Top 10 tips for maximising your London property investment in 2024

The London property market ended 2023 on a high, witnessing a remarkable 12% year-over-year increase in rents, as reported by Rightmove. This promising trajectory seems set to continue into 2024, making it the perfect time for landlords to maximise their returns.

To navigate this competitive market successfully, property investors in London can benefit from the following straightforward and practical tips.

1. Importance of research and location

Research forms the bedrock of a successful property investment. Areas like Nine Elms, Wembley, and Hayes are currently undergoing substantial regeneration, attracting attention from both developers and investors. The improvement in infrastructure and local amenities has significantly inceased rental demand. Rental investors should look to explore areas with the best rental yields, to achieve the most lucrative returns.

2. Reputation of the developer

From stylish studios to spacious apartments, homes in London meet the diverse lifestyle needs of a range of homebuyers. Developers in the UK capital cater to buyers with distinct needs and budgets. While some builders focus on luxury, some have a reputation for delivering affordable and quick homes. Always consider a top-tier developer with a good reputation to ensure a stress free experience . Here are some of the most reputable new home developers transforming the London skyline.

3. Importance of due diligence

For property owners in London, there islegislation in place to protect their interests. Even while purchasing from a reputed developer, a professional survey provides a detailed report on the structure and condition of the property. Details about the structural build quality, compliance with regulatory standards and verifying maintenance obligations will bring invaluable peace of mind. This step is especially crucial for overseas landlords seeking to manage properties remotely.

4. Understand your finances

Properties for investment purposes are not usually the first property purchased by the buyer and may incur taxes such as stamp duty that need proper planning. Also, additional costs for services, such as legal and mortgage processing fees over and above the deposit, need to be factored in before making any financial commitments. Conduct a viability check to ensure the rental yield can offset long-term costs, even in a market with fluctuating interest rates.

5. Capital growth versus rental yield or a mix of both?

Capital growth and rental yield are the two most important metrics for any property investor. However, they aren’t exclusive of each other. While capital growth is rewarding in the long term, rental yields provide an immediate source of income. Having an investment strategy that focuses on consistent rental yields backed by a vision of holding the property long enough to reap significant capital gains is one of the best ways of maximising your investment.

6. Consider your ideal tenants

Knowing your tenant profile is a crucial step in the journey of a successful landlord. You need to factor in their lifestyle and commute needs as well. For example, students need an academically nurturing environment and a quick commute to their university. Similarly, working professionals need well-furnished homes with good transport links to the office. Understanding tenant needs and catering to them will make your property desirable and help you earn better rentals than the market average.

7. Be aware of tax/legal requirements

Like any other investment, owning real estate is also subject to multiple taxes and duties. In addition to the financial obligations, property owners also have legal obligations, which include declaring their income proofs and source of funds. Based on these declarations, mortgage rates and taxes are calculated. You will need to be on top of all these requirements, for which consulting with seasoned property experts and solicitors will help. To make things a little easier, we have put all the property jargon you are likely to come across in this simple guide.

8. Importance of furnishing to make your property stand out

For buy-to-let investors, furnishing plays a significant role in securing high-yielding tenants with longer tenancies. Professional renters are willing to pay a premium for well-dressed homes with stylish furniture. There is a difference in the furniture sourced from a store versus the expertise of a professional with experience in the London rental market. To get you the best deal on furniture and maximise your rental potential, our sister company, InStyle Direct, has a range of landlord furniture packs styled by professional interior designers.

9. Professional property management service

Acquiring a property as an investment is only half the job done. Managing a property in London requires a hands-on approach with many responsibilities and obligations ranging from tenant profiling to acquisition, deposit and rental collections, compliance with local legislation and ongoing property management. Corporate tenants usually insist on a professionally managed property, as it reduces their hassle and provides assurance of dedicated service. Benham & Reeves has a legacy spanning over 60 years of delivering seamless and hassle-free property management services to London landlords. Here’s the full range of services you can expect when you partner with us.

10. Invest in your agent before investing in your property

Many hands make light work, and when it comes to maximising your London property investment, the committed hands of your agent can simplify the experience. From sourcing your tenants and taking care of all their needs to meeting all the legal and tax obligations, your agent is your partner in the investment journey. They will help you get the best out of your property, so choose your agent wisely.

By incorporating these practical tips, investors can position themselves for success in the London market. If you require assistance in your London property journey, our property specialists across 21 local branches and 14 overseas offices are happy to help.