London Property Market Offers A Sound Investment

BY Realty+

How popular is the UK among Indian property buyers?

Demand for UK properties is definitely growing among Indian buyers. At Barratt, around 30% of our sales in London are now to overseas buyers - both those looking for a second home and pure investors - with roughly 3.5% of those coming from India. That’s more than three times the number of Indian investors than before COVID, when they made up less than 1%.

Why are Indian buyers choosing to invest in the UK?

There are both cultural and financial reasons why so many Indian buyers choose the UK. With most people in India speaking a good level of English, and a very similar legal system when it comes to house purchases, there is a real sense that buying in the UK is relatively uncomplicated and the country can be a home-from-home. Multicultural London, in particular, offers some amazing Hindu temples, gurdwaras and mosques, as well as excellent restaurants that offer a taste of home.

Financially, the British pound is fairly weak at the moment, so with the rupee being pegged to the dollar, UK property offers a good buying opportunity for overseas investors. In fact, buyers from India will get 20% better value for their money than two years ago thanks to these currency fluctuations, with prices per square foot nearly identical in London and Mumbai.

What are the advantages of London?

While the largest concentrations of ethnic Indian people living in the UK are based in the northern cities of Leicester and Birmingham, for those buying predominantly as an investment or for children coming to study, London has more to offer. 

The rental returns in the capital city are the highest in the country, with the average monthly rental across central London now standing at £6,811 per calendar month as opposed to just £983 a month in Leicester and £1,425 in Birmingham1. There is huge rental demand in London, with agents reporting seven or eight suitable applicants for every available property in London Travel Zones 3-5, so there’s little prospect of empty properties for those who buy purely as an investment.

Secondly, capital growth in the London property market has tended to be steady and relatively certain. While market dips and peaks can be a rollercoaster ride in some parts of the country, London has a solid and reliable upward trend that, so far at least, has generally defied temporary blips. The increase in value of London properties over the last 30 years has compounded 9% each year, putting most investment options to shame – and that’s without any profit on rentals.

What motivates London buyers?

At Barratt we tend to see two main types of Indian buyer. For some, London property is chosen purely for its perceived value as a relatively safe and lucrative investment, and the owners may never choose to visit the country. For others it can be a way for the younger generation to get on to the property ladder and enjoy their own space in an exciting city.  

The number of Indian young people choosing to study at UK universities has jumped massively, from 52,545 in in 2019-2020 to 84,555 in 20-21, and looks set to soar following a new memorandum of understanding between UK and India to recognise each other’s higher education qualifications2. With so many of the world’s finest universities being in and around London, and with UK student accommodation being notoriously expensive and poor quality, for many families it is a shrewd financial move to purchase a property, especially if they have several children likely to study overseas.

What kind of properties are most popular?

We see interest among Indian buyers for one-, two- and three-bedroom apartments right across the city. According to UK Government statistics some London Boroughs are particularly popular with those of Indian origin, with the top four locations being Harrow, Brent, Ealing, Hounslow3 – all places where we have superb new developments:

Harrow - Barratt London’s Eastman Village development, designed by award-winning architect Pollard Thomas Edwards, features one- to three-bedroom apartments and our brand new SMRT studios, which offer compact London living at lower prices. 

Ealing - Western Circus, Acton, offers an incredible 22% expected capital growth in the next five years coupled with strong rental demand.

Hounslow – the new High Street Quarter is creating a vibrant new community in the heart of Hounslow, with one-, two- and three-bedroom homes currently available.

Hillingdon – Hayes Village is an exciting regeneration project on the former Nestle factory, next to the Grand Union Canal; Crossrail has just opened and the area has faster connections than many Zone 2 locations. 

Tags : London Property Market Investment Stuart Leslie International Sales and Marketing Director Barratt London Indian investors UK capital