Real Estate Investor Magazine South Africa November 2014 | Page 60

UK PROPERTY BY MIKE SMUTS London’s Housing Fundamentals A market like no other L ondon’s property market is like no other in the world. It moves faster and vastly differs from street to street. There isn’t one London housing market, but a myriad of markets. These respond to a variety of factors; from factory and office closures to the pulling power of nearby schools. The local market will directly affect the type of tenant you attract, your rental return and the level of capital appreciation you can expect, so it’s the most important element to get right. There are four fundamentals you can employ to find the right location for your London investment. 1. Public transport Unlike South Africa, car ownership in London is a luxury for most. Many Londoners rely on the public transport system and pay a premium to be within walking distance from a station. In a research note published last month by Nationwide, one of the UK’s largest mortgage providers, found living within 500m of a public transport station added £42,000 to the value of a property in London. To ensure your property appeals to a large market of potential tenants, it is essential you invest in an area with good public transport. 2. Public amenities Londoners don’t do large monthly shops for groceries– it’s a pain to lug them home on the bus or Tube. It’s more convenient to pop into a shop on your way home and get a few items for dinner, grab a take-away, or eat in a restaurant. Your tenants will want easy access to shops, restaurants and bars. Keep in mind, if your local rental pool consists of families, they will shun noisy high streets in favour of parks, libraries and leisure centres. 3. Education In London, competition is fierce for places [