Truths & Myths of the London Property Market
London has experienced a slowdown in property price growth and rental movements in the past 2 years. How bad is Brexit’s effect on the capital city?
The UK population is still expanding. ONS’ latest data (Aug 2019) reveals that London has the highest population growth in the UK, with the country’s top 4 fastest-growing local authorities.
Migration has been the greatest driver of the UK’s population growth since 1998 with London having the largest number of migrants (38%), especially non-EU migrants. In the last decade, London’s job creation rate outstripped its population growth, with 1 in 3 new jobs created in the capital. Job vacancies have also just increased by 23% y-o-y.
An expanding population needs housing. London has one of the tightest vacancy rates in England (ONS 2018), with only 1 in 50 houses (1.9%) available for rent. Current available rental stock is down by 33% compared to 2017 (Rightmove 1Q2019). Average asking rents have increased by a record 8.2% in 2019, the highest annual rise in the capital since 2012. Knight Frank predicts a cumulative rental growth of 15.9% over the next 4 years.
With demand outstripping supply, average asking rents in London increased by a record 8.2% in 2019, its highest since 2012. Source: Rightmove
Prices of London property has grown exorbitant over the years. But, the slowdown in the property market, coupled with the weakened pound and Brexit uncertainty has provided a rare opportunity for investors. West London*, located within one of the fastest-growing local authorities in the UK, is increasingly becoming one of the best places to invest in thanks to rapid population growth, relative affordability and the Crossrail expansion at Paddington and Acton Mainline Station.
The Crossrail (to be known as Elizabeth Line) will be a gamechanger once launched in 2020, shortening distances and driving housing demand. Source: National Rail/TfL
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