We’re often asked by friends and guests to share our tips for buying an apartment or home in London. Perhaps they’ve already been searching for properties for sale in London or sometimes they just love London and are looking for the perfect apartment they could stay in when visiting and rent out for additional income while they’re away. We love helping people find just the right property in London!
Recently some returning guests to London Perfect got in touch with us. They are working and living in Singapore, but they plan for their son to attend university in the UK, and they personally love to visit London several times each year. Their long term goal is to spend 2 to 3 months in London enjoying the feel of the city, the great food, shopping, history, theatre and buzz. Yet they’re searching for a cozy apartment to settle in to after a day out in London.
They asked if we could help them find a good apartment for sale in London since they like how we operate and valued our practical input on furnishing with the view to us handling rentals and management when they were away. Just as we share straightforward advice about how to find and buy an apartment in Paris, people ask if we can share insights on London. We’d love to!
Top 10 Tips for Buying an Apartment or Home in London
1.) Pay as much as you can for the best location.
Even if it means smaller but in the absolutely best area, that’s what we recommend. Start with a a survey of prices – the highest are most desirable. Kensington, Chelsea, Knightsbridge, South Kensington and Notting Hill. Yes, you can bet on up and coming areas such as around King’s Cross or south of the Thames, but, as we say in Paris, we believe in buying defensively.
Why: Price volatility is lower and demand consistently higher in a weaker market. If you need to sell quickly in a difficult market, the prime properties sell first and lose the least.
2.) Be cautious about new developments.
A number of our guests from Asia have been looking to invest south of the Thames, such as Battersea and new high rise developments. Developers come to them and present plans at seminars and exhibitions in Asia. The higher priced developments are beautiful, well built and impressive. Purchased early they can be bought on spec. Some offer fabulous views of the Thames as well. While these presentations are beautiful and there’s a lot of buzz in newly developed areas, most of these modern complexes are outside central London in areas like East London and the docks, Battersea, Chelsea Power station, etc. There was one we spotted that was even further out with a sales tagline “20 minutes to Harrods.” Really?! That one especially galled us.
These types of flats may certainly be the right purchase for you and your family, especially if you’re planning to live and work near there one day. But if your plans center around enjoying truly the best of the London lifestyle or if you’re interested in extra income from short term rentals (see #3 below), we advise you to consider the value of more central locations. These are the areas that are perfect for you if you enjoy the following:
- Shopping in Central London: from Oxford Street to Knightsbridge, Sloane Street, King’s Road, Covent Garden & Notting Hill
- Love going to new exhibitions, museums and theatre in the West End
- Enjoy the ballet and opera
- Antiquing in Notting Hill, West Chelsea and World’s End
- Foodie: enjoy trying new restaurants in Chelsea, Kensington, Notting Hill & more!
- A charming London neighbourhood setting
- Easy access on foot to the tube
3.) Investing for Rental Income in London
There are 3 types of investment buyers in London:
1. Those who want to diversify their portfolios and simply own property in a country known for stability, safety and the Rule of Law.
2. Buyers investing strictly for the rental income and hopefully, capital appreciation. They do not plan to occupy the property themselves. For these buyers, long term rentals are generally the best way to go. This is not our business at London Perfect but there are many long term rental agencies eager to help.
Recently we have seen a slight excess of rental properties on the market – but the top locations and flats generally receive steady rentals and income.
3. The 3rd type of buyers are the ones who love the lifestyle in London, wish to diversify but also live in and enjoy living like a Londoner for weeks to months every year. This buyer represents the majority of our London Perfect family of owners.
Caveat Emptor: If you’re the 3rd type of buyer the following advice is important:
- Find a reputable search agent who will check that you are allowed to do short term rentals in the building you’ve found.
- We also recommend buying individual properties, such as mews houses, where you aren’t subject to high communal charges or other.
- Holiday Lets: Location, location, location: With nearly 20 years of experience, we can assure you that apartments or homes outside the center of London are much less desirable for short term/holiday rentals.
We’ve seen this again and again. We have represented some charming properties in East London and south of the river. While we presented them beautifully and offered excellent service, they simply didn’t fill up as well. Prices were lower and they were empty more often than the central, known locations.
Emerging New Areas: Even if the area is a trendy new neighborhood, there are prejudices that are hard to dispel. In one case, a taxi driver was taking guests to a property south of the river and blurted out that the area was unsafe. It was completely false because it was closer to Chelsea than Brixton, but the guests were scared the whole week that Jack the Ripper would come back. We advised the owners to sell or to look for long term renters. Having seen our success managing an apartment we helped them find in Paris, they sold and bought in Kensington and have been renting the property for years with great success. So while buyers pay less they learn to their dismay that there are lots of other new apartments nearby and they can’t rent at higher prices or keep them rented.
Battersea and new area near Chelsea Power Station are also considered up and coming and have some beautiful new developments. The main concern here is quick and easy access to central London by bus because there is no tube nearby. Love the old power station but consider if you’re looking for an investment return: hundreds of flats that look alike and a long distance to tube.
We are short term rental experts. We can recommend search agents we trust, builders and even designers who can oversee the remodel and help furnish at a reasonable price. You’ll also enjoy good management and rental income while you’re away. Before you start, we can help guide you and offer tips on how to find the perfect location and to remodel and furnish to the most successful standards.
If you’re considering a property as a potential short term rental, contact us and we’re happy to offer our honest opinion about its potential. If we think you might have issues with neighbors or may do better renting it long term, we’ll tell you up front. The reason is obvious. We can only help owners achieve the best returns if we guide them properly!
4.) How Close To Public Transport?
This step is extremely important. Take time to really explore the neighborhood on foot. Even if you plan to drive, find out how long it takes to walk to the nearest Tube station. This is especially important if you plan on renting your apartment or home as it’s the basic mode of transportation in London. While the London bus system is fantastic, it’s not as appealing to many visitors to London who look for vacation rentals with easy Tube access. Relying on taxis is also expensive and inconvenient for travellers on holiday.
While searching for properties, take the time to talk with neighbours, introduce yourself and learn about possible building restrictions for short term rentals. It pays to do your research in advance! Is the setting welcoming or would your new neighbours be the types to complain about every footstep?
We can’t emphasize how important it is to imagine yourself on holiday in London if you’re buying an apartment or home with short term rentals in mind. Thinking of important amenities like shopping, markets and transportation is fundamental – both for enjoying the best of the London lifestyle yourself and also for making an appealing holiday rental.
5.) Walk around at night: The Safety Factor.
We are tempted by the prices in new developments ourselves because you can get so much for your money. Some areas are up and coming but close to neighborhoods that aren’t as safe to walk around in at night, such as Camberwell and King’s Cross. They are changing rapidly, but before you sign we recommend hiring a driver (we can recommend a great and very trustworthy one!) and ask him or his guys what they think of the neighborhood. It’s the cheapest investment you could make. They can fill you in on what they like and don’t like nearby as well as telling you the real scoop on how long it takes to get to theatres in the West End or top shopping spots in London.
6.) Leasehold or Freehold.
We personally dislike the idea of buying an apartment on “leasehold” – a medieval law that “leased” the actual apartment for a number of years at virtually the same price as a regular purchase. At the end of that period (60 years, 99 years, etc.) the property reverts back to the freeholder. Lots of cases, lots has been said and done. Belgravia was the worst, but now it’s now possible in a long and complex way to possibly purchase a freehold in the neighbourhood. But make your life easier and look from the beginning for freehold or at worst a very, very long leasehold.
7.) Check the annual charges and building costs.
If you’re considering buying an apartment in a larger building, be sure to check in advance on the annual charges and what building costs there may be. They can cost into the thousands and when compared with a townhouse or mews home in central London, where you don’t have any, it is an expense you might want to consider.
8.) Don’t count on rental income to cover your mortgage.
We are conservative people who try to advise our owners and friends as we would invest ourselves. Be sure that if the market weakens and rental prices drop, you will still be able to cover expenses. Prices in inner London have continued to rise, but please do not make the mistake of extrapolating a rising price curve into the indefinite future.
We advise potential purchasers to: buy the best you possibly can, but ONLY what you can afford. Look for the highest quality and best location within your budget and don’t buy “above your paygrade.” This could turn a dream home in London into a headache if your economic situation should change unexpectedly.
This has been the cornerstone for our owners since we started writing our tips on buying an apartment in Paris. Fortunately, our buyers have seen their real estate values maintained or even increased in both cities, but our rule stands.
9.) Look beyond flashy design and furnishings.
Very hard but critical. A lot of developers know how to buy what looks good but not install it well. Dark woods, down lighting, contemporary design, etc. Look hard before you purchase. How is parquet finished? Is it the cheapest laminate you can buy or a quality one? What looks like it is a perfect move in condition can be a surprise if you don’t look closely in advance!
10.) The 10th Commandment: Consider Hiring a Search Agent.
I used to scoff at the idea of using a search agent, especially with all the options on the internet where you can pore thru listings yourself. We searched on our own and in a good market, but it was a nightmare from beginning to end. Even though we were living in London! We lost three properties being gazumped or outbid, but finally got one that stuck when we asked they take it off the market after our offer and they agreed. Contact us if you’d like an introduction to our favorite search agent Suzanne. Click here to read an interview with Suzanne and find out more about her tips for buying a vacation rental in London here.