How can you spot a good property deal in London?

Finding the right property in a competitive real estate landscape like London can be like looking for a needle in a haystack. You may find a property within your budget but location is either unsuitable or lacks proper infrastructure. If everything seems well on the surface, there may be underlying structural or legal issues that could affect value appreciation and hinder sales in the future.

So, how can a buyer identify a great property deal that covers everything from the right price to a great location with long-term growth potential? Here are some investment tips for first-time buyers or investors on how to spot the perfect London property.

What makes a property a ‘good deal’?

A good deal is usually an undervalued property in a desirable location with high demand. While such a listing might be rare, it is not impossible to find one, as local estate agents are usually familiar with sellers in the area and can show you multiple options. From Canary Wharf in East London to Southall in the West, Hampstead in the North and Clapham in the South, we bring you the best properties across the most exciting neighbourhoods in the UK capital.

Always check for connectivity, open spaces, regeneration, lifestyle amenities and other indicators, such as rental demand and property price growth. These features usually determine whether an area has a high rental yield and strong capital growth potential, making it investor-friendly. As your local agent, our property experts can guide you in finding properties in the most sought-after London postcodes.

Key factors to evaluate in a London property deal

While most London neighbourhoods offer exceptional facilities, a few stand out for their price-to-lifestyle ratio by combining all these features.

i. Location: Proximity to transport, schools, regeneration areas

Whether it is the extensive Underground rail network that spans over 250 miles or the Elizabeth Line that passes through essential stops like Heathrow Airport and the City, properties close to a station are always in demand. Similarly, residences in the top regeneration areas with good schools and green spaces have a better chance of value appreciation.

ii. Rental Yield Potential: Estimate ROI if letting out

If you want to invest and earn rental income, always check and compare the rental demand to yield ratio to get an idea of potential income through investment. You can use our specialised ROI calculator to get an accurate return estimate and evaluate a rental property’s profitability.

iii. Future growth indicators: Planned developments, new transport links

Many neighbourhoods are hotspots for future growth with new developments, transport, and infrastructure upgrades. Researching upcoming projects and development plans through developer brochures, council, and media reports is a good way to discover such updates.

iv. Demand: Is it a buyer’s or seller’s market?

Demand plays a key role in determining whether a deal is good or not. Depending on the supply of available housing stock and the number of buyers vying for each property, you will know whether you are in a buyer’s or a seller’s market. Timing your investment accordingly will give you much-needed negotiation leverage.

Red flags to watch out for

When evaluating London property prices, always watch out for overpriced listings that exceed the area’s average compared to other properties in the same locality and with similar size and other features. Sometimes, a property’s price could be less than the average. Still, there may be loopholes in the ownership titles with unresolved leasehold issues, such as a short balance period left in the lease or uncertainty about the freehold owners.

Even when all looks good, expensive service charges or ground rents may impact long-term property ownership. Other issues, such as structural faults, poor EPC, and leakages, may be present and require extensive repairs, raising the net cost of ownership. Always carry out proper due diligence and seek professional assistance to ascertain whether a deal is as good on the inside as it looks on the surface.

With 21 London branches and 14 overseas offices, Benham and Reeves is a reputed lettings and estate agent with a legacy of over 65 years. We bring you a variety of new homes for sale from top developers and guide overseas investors throughout their London property journey. Contact us to find the best property deal in the UK and its thriving capital.