Authored by the expert who managed and guided the team behind the United Kingdom Property Pack
Yes, the analysis of London's property market is included in our pack
What will happen in London’s real estate market? Will prices go up or down? Is London still a hotspot for foreign investors? How is the UK government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with estate agents, property developers, and clients who buy properties in London, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) More foreign buyers will invest in London real estate as the pound weakens
The weakening of the pound makes London real estate more attractive to foreign buyers because it effectively lowers the price of properties for those using stronger currencies. When the pound is weak, foreign investors can get more value for their money, making it a prime time to invest in London real estate.
Historically, we've seen this pattern before. For example, after the Brexit referendum in 2016, the pound's depreciation led to a surge in foreign investment in UK property, especially in London. This trend repeated in 2023 and 2024, with international purchases accounting for 27% of sales in London in the first quarter of 2024, up from 24% the previous year.
Moreover, reports show that a weak pound makes UK properties more affordable for foreign investors, particularly those from countries like the United States. This affordability is a significant draw, as evidenced by the 40% contribution of Indian buyers to foreign transactions in London in the first half of 2024, marking a 9% annual increase.
Sources: Joseph Mews, IP Global
2) Rental yields near universities like Bloomsbury will rise due to more international students
The influx of international students into London has been on the rise, with a record 758,855 international students reported in the UK for the 2022/23 academic year. This represents a 12% increase from the previous year, indicating a growing trend of international student enrollment.
As more international students come to study in London, the demand for student accommodation, especially in areas like Bloomsbury, has increased significantly. Despite financial pressures, the demand for purpose-built student accommodation remains strong, driven by the increasing number of students and limited housing supply.
International students often prefer living near their universities for convenience, which further boosts the demand for housing in university-adjacent neighborhoods. This preference, combined with the shortage of affordable student housing in central London, contributes to higher rental yields in these areas.
Sources: HEPI, ICEF Monitor, University Living
We have made this infographic to give you a quick and clear snapshot of the property market in the UK. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Virtual reality tours will simplify international investment in London real estate
Virtual reality property tours have become a game-changer for international buyers looking to invest in London. In the past few years, we've seen a significant rise in the adoption of virtual reality technology, with the global virtual tour software market projected to grow substantially by 2030. This growth is largely driven by the increasing digitization and the integration of AI technology in the real estate industry.
One of the key reasons virtual reality tours are so appealing to international buyers is their ability to break down geographical barriers. Buyers can explore properties from the comfort of their own homes, saving both time and travel costs. This is particularly beneficial for younger buyers, who are more likely to book a showing if they can first take a virtual tour. In fact, real estate listings with virtual tours receive significantly more views and engagement than those without.
Moreover, the trend of offering virtual tours has been successful in other cities, such as Marrakech, where real estate agencies have reported faster sales due to the engaging experience these tours provide. This trend is expected to be similar in London, making it easier for international buyers to make informed decisions without the need for physical visits.
Sources: PhotoUp, Sands of Wealth, Fortune Business Insights
4) Luxury property prices in Mayfair will rise as more Asian investors enter the market
In recent years, we've seen a notable increase in foreign investment in London's real estate market, particularly from Asian investors. Although in 2023 and 2024, the level of investment from Asia was lower compared to other regions, there were still significant purchases in luxury areas. For instance, Sun Venture, a Singaporean firm, acquired the Hyatt Place London City East in 2024, highlighting ongoing interest in high-end properties.
Moreover, the wealth growth in many Asian countries has been substantial, providing a large pool of capital for real estate investments. This financial capability, combined with favorable currency exchange rates, makes London an attractive market for Asian investors. The soft pound has made investments more affordable for those with dollar-based currencies, further encouraging purchases in prime locations like Mayfair.
Additionally, historical data shows a strong correlation between foreign investment and property price increases in London. The influx of capital from foreign investors, including those from Asia, has consistently bolstered the prime real estate market. This trend suggests that as Asian investment continues, we can expect property prices in luxury areas like Mayfair to rise.
Sources: Bisnow, Magnate Assets, CBRE
5) Properties in bike-friendly areas like Hackney will become more attractive as cycling infrastructure expands
London's cycling infrastructure has grown dramatically in recent years.
Transport for London (TfL) has expanded its cycle network from 90km in 2016 to over 400km by September 2024, with 20 new Cycleways routes launched in 2023/24, connecting more than 600,000 Londoners. This means more people can easily access bike-friendly areas, making them more appealing for potential property buyers.
High-quality cycle infrastructure is known to boost property values. For example, when cycle lanes on Royal College Street in London were upgraded, nearby property values jumped by 45%, adding £7.7 million in value compared to other properties in Camden. This trend is likely to benefit areas like Hackney, which already have established cycling routes.
Londoners are increasingly choosing cycling as their preferred mode of transport. In 2024, there were 1.33 million daily cycle journeys, up by 5% from 2023 and by 26% since 2019. This growing trend makes neighborhoods with good cycling infrastructure more attractive to homebuyers.
Hackney, known for its bike-friendly streets, stands to gain from this shift. As more people opt for cycling, properties in such areas become more desirable, potentially driving up property values.
Investing in a property in a bike-friendly area like Hackney could be a smart move, as the expansion of cycling infrastructure continues to make these neighborhoods more appealing. With more routes and better connectivity, the demand for homes in these areas is likely to rise.
Sources: Traffic Technology Today, BikeBiz
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6) Property values in areas like Barking will rise as new transport links are developed
In the past, we've seen how new transport links can significantly boost property values in areas that were previously overlooked. For example, since the Crossrail project was announced back in 2008, areas with Crossrail stations have experienced an average house price increase of 79%. This trend is not just limited to one area; the W1 postcode saw a staggering 215% rise in property values.
Stratford is another great example. Since the start of the Crossrail project, property prices there have grown by 95%. This growth is expected to continue as more people recognize the benefits of improved connectivity. The same pattern is anticipated for Barking, especially with the Barking Riverside development, which includes an extension of the Overground and plans for 10,800 new homes.
Real estate analysts, like those from Benham and Reeves, have been tracking these trends and note that areas with new transport links now have a 14% premium over the wider local authorities. This is a clear indication that improved transport infrastructure can lead to higher property values by making areas more accessible and attractive to both residents and investors.
Sources: Benham and Reeves, Evening Standard, Transport for London
7) Property values in Battersea will rise as new green spaces are developed
Properties near London's green spaces are fetching higher prices than those further away.
Take Green Park in Westminster, for instance, where homes are priced at a 55% premium compared to the borough's average. This trend highlights how being close to parks can significantly boost property values.
In Battersea, the story is similar. Homes in the SW11, SW3, and SW8 postcodes near Battersea Park are priced at a 50% premium over the wider Wandsworth area. This shows that green spaces like Battersea Park make the neighborhood more attractive, driving up property prices.
It's not just about buying; rentals are also affected. Areas around new parks, such as those near Battersea Power Station, are seeing higher rental yields. Improved amenities and transport links are drawing in tenants willing to pay more, which in turn boosts the local property market.
Living near a park isn't just about the view; it's about lifestyle. People are increasingly valuing the access to nature and recreational spaces, which is reflected in the property market.
As more green spaces are developed, expect property values in areas like Battersea to continue rising. The demand for homes near parks is a trend that's here to stay.
Sources: Property Industry Eye, Landlord Knowledge, Top Property UK
8) Properties with garden space in Clapham will become more valuable as urban farming gains popularity
In recent years, the trend towards urban farming has been on the rise, particularly in cities like London. This movement is driven by a growing interest in sustainable living and self-sufficiency, as seen in projects like Growing Underground, which utilizes former air-raid shelters to grow food year-round.
As more urban farming initiatives emerge, such as Growing Communities, they provide local residents with access to sustainable, organic food. This aligns with the increasing consumer demand for organic and locally grown produce, which urban farming can supply. Consequently, properties with garden space become more desirable, as they offer the potential for personal food production.
Moreover, real estate reports have shown that homes with gardens in areas like Clapham Common have higher property values. For instance, properties on Nightingale Lane have an average price of £11,611 per square meter, compared to £9,242 per square meter on Abbeville Road, highlighting the premium placed on garden space.
Sources: Sustainweb, Housemetric, Artefact Magazine, GlobeNewswire
We made this infographic to show you how property prices in the UK compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Co-living spaces will become a popular investment in Hackney as their popularity grows
The buzz around co-living spaces in Hackney is growing, and for good reason.
With 1.7 million people renting shared accommodations across the UK in 2023, and 630,000 of them in London, it's clear that affordable housing is in high demand. Co-living spaces are stepping up to meet this need, offering a more budget-friendly option for many.
Investors are taking note because co-living properties in London boast rental yields 30% higher than traditional real estate. For renters, these spaces are also appealing, offering a 7% discount on rents compared to other private rentals, making them a smart choice for those watching their wallets.
Hackney is seeing a wave of young professionals who are drawn to the flexibility and community vibe of co-living. This shift is perfectly in tune with what co-living offers: shared responsibilities and a sense of community through events and activities.
These spaces are not just about saving money; they’re about a lifestyle that resonates with the modern urban dweller. The community-focused environment is a big draw for those who value social connections and shared experiences.
As more people seek out these benefits, co-living spaces are becoming a hot ticket in Hackney, promising both financial returns for investors and a vibrant living experience for residents.
Sources: Knight Frank, Alesco Property, Property Investor Today, BTR News
10) Demand for homes near parks and green spaces like Hampstead Heath will grow as wellness interest rises
The growing interest in wellness is indeed increasing demand for properties near parks and green spaces in areas like Hampstead Heath in London. This trend is supported by several factors that have emerged over the past few years.
Firstly, Hampstead Heath itself is a significant draw, with its 58,000 ancient trees and the ability to attract over 47 million visitors annually. The economic benefits of living near such green spaces are substantial, with a reported natural capital value of £1.5 billion over 50 years. This underscores the financial and societal value of proximity to nature.
Moreover, the wellness real estate market has seen remarkable growth, with an annual increase of 18% from 2019 to 2023. This growth is fueled by a rising consumer preference for healthier lifestyles and environments, as people increasingly seek out homes and communities that support their well-being.
Additionally, studies have shown that living near nature can significantly improve both physical and mental health. Hampstead Heath, for example, plays a crucial role in removing carbon from the atmosphere and enhancing air and water quality, which are vital for overall health. Urban planning trends are also shifting to prioritize green spaces, recognizing their importance in reducing stress and improving well-being.
Sources: City of London Corporation, BeautyMatter
11) Demand for accessible homes in Barnet's suburbs will grow as the population ages
As we look back at 2023 and 2024, it's clear that the aging population in London has been steadily increasing. According to the 2021 Census Data, over 11 million people in London were aged 50 or over, with a significant portion being 65 or older. This growing demographic trend means more people are entering an age where mobility can become a challenge.
In the past, there was a notable rise in mobility-related disabilities among the aging population. Many older adults in London, including around 400,000 wheelchair users, lived in homes that weren't suitable for their needs. This highlighted a pressing need for more accessible housing options. Additionally, a large number of disabled individuals were on waiting lists for homes that could accommodate their needs, with some facing waits of up to 47 years for a new-build wheelchair-accessible home.
Older adults often prefer homes that are easy to navigate, such as single-story homes or those with minimal stairs. This preference naturally increases the demand for accessible housing, particularly in suburban areas where such homes are more common. Suburban areas like Barnet have seen increased interest from older buyers seeking more spacious and accessible living environments.
Government reports, such as the Joint Strategic Needs Assessment for Barnet, have highlighted the growing need for accessible housing due to the rising rate of permanent admissions to care homes among those aged 65 and over. These reports emphasize the importance of accessible living arrangements to support the aging population.
Sources: Trust for London, Inclusion London, Barnet JSNA
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12) Property prices in Shoreditch will rise as East London's tech industry grows
The tech scene in East London is booming, and it's making property prices in places like Shoreditch skyrocket.
One big reason for this is the massive investment in tech startups. Even though grant funding dipped in the East of England, the tech sector is thriving thanks to hefty equity investments. This financial support is crucial for nurturing tech hubs and startups, which in turn drives up the demand for housing as more people flock to the area for job opportunities.
Job growth in the tech sector is another key factor. In the boroughs around the Queen Elizabeth Olympic Park, over 110,000 new jobs have been created, mainly fueled by the tech and creative industries. This employment boom means more folks are hunting for homes nearby, which naturally pushes property prices higher.
Shoreditch, in particular, has become a magnet for tech companies looking to relocate or expand. A prime example is Tech Hub, which has poured £2.2 million into a new venue in Shoreditch, highlighting the area's allure as a top spot for tech businesses. This kind of development draws in more companies and workers, further boosting the demand for housing.
With the tech industry thriving, Shoreditch is transforming into a vibrant hub. The influx of tech professionals is not just about jobs; it's about creating a lively community that attracts even more people. This dynamic environment is a major draw for those looking to invest in property, as the area's appeal continues to grow.
As more tech companies set up shop in Shoreditch, the neighborhood is evolving into a bustling tech ecosystem. This transformation is not only reshaping the local economy but also making Shoreditch a highly desirable place to live, work, and invest in property.
Sources: Barclays, City AM, City AM
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.