can be difficult to compare which London property investment makes sense.
Until the start of the millennium, period properties - Georgian, Victorian and Edwardian were the clear choice for homebuyers as well as London property investors. New-build modern apartments were long perceived as 2nd best.
But, things have changed. In the past five years, demand for new-build apartments has grown year on year. In Knightsbridge, Westminster, Mayfair and the Riverside, new build apartments are being snapped up as fast as they can be built. And this is not just by London property investors.
London has attracted international property investors from all corners of the globe for several decades. For a long time the market was dominated by buyers from mainland Europe, the US and the Middle East. However, in the past decade, the number of property investment from China, Hong Kong, Singapore and Malaysia has grown exponentially. In 2011, buyers from the far-east made up sixty percent of the market for new-build property purchases in central London (Knight Frank Research, 2011).
Throughout the 1980’s and 1990’s new-build apartments were regarded as sub-standard. But in the past decade, tighter building regulations and more demanding buyers have seen quality improve. By comparison, period apartments converted in the 1970's and 1980's suffer from poor soundproofing, creaky floors and structural issues.
If you buy a new build apartment from a reputable developer, the first ten to fifteen years should be maintenance free. This makes service charges and outgoings more predictable. In contrast, Victorian and mansion apartments tend to vary wildly from year to year.
There are now more single buyers and childless couples wanting to live in the heart of the city and new-build apartments fulfill the need.
What’s a better London investment – new-build or period?
It is hard to say whether period property or new-builds will be a better investment long term. But there are several considerations before buying a new-build, including its location, number of apartments in development and local amenities.
The upside is that new-developments are providing investors and homebuyers with a credible alternative to the finite resource of period properties that for so long, have been the only choice.
Whether you are buying new-build or period, doing your research is essential.
Tips when searching for new-build properties
- Check other developments by the same developer. Have they
- For resale apartments: assess turnover of sales in the building. Low turnover is a positive indicator.
- If rental investment, check out the prospective rental market. Lots of un-let properties are not a good sign.