London Property Price Forecast 2024

London has always been a clear destination for property investment as the performance of buy-to-let properties in London has been incredible over the last 20 years.

Property price growth in the capital accelerated at an unprecedented rate between 2013 and 2023, increasing by around 66.91% according to the UK House Price Index.

Reports from Nationwide state that house prices currently remain relatively stable, despite increases to the Bank of England base rate.  

After a period of stagnation, it seems that London property is once again on the rise and forecasts suggest this will continue over the next decade. As the market corrects itself, people return to the city and a lack of supply exacerbates the race for space.


London Property Market in 2024

As we look ahead to 2024 and the position the London property market finds itself in, it’s difficult not to draw parallels with the history of the city’s property sector.

London is, and always will be, a premium destination for buyers - both domestically and internationally. With one of the largest financial sectors in the world, a vast population seeking job opportunities that can’t be found elsewhere and some of the most desirable neighbourhoods in the country - it’s a city that is always popular with buyers.

Even after the financial crash in 2009, the city bounced back quickly and prices skyrocketed. Now, after the challenges of the pandemic and Brexit, London property is starting to recover.

Rental yields have continued to grow, with Savills reporting continued rental growth in Prime London rents increasing by 1.4% in the second quarter of 2023. 

While regional cores continue to dominate the spotlight, each forecast suggests the same thing. London’s property market is on the rise and will outpace any other UK city in the next few years. 

Key London Facts

Average Property Price: £525,629 as of May ‘23 

Average Rental Yield: 4.1%

Property Growth Prediction (23-26): 4%

Rental Growth Prediction (23 – 26): 23%


London Property Prices in 2024

London property’s declining performance since 2016 can be largely attributed to two factors. The first is the large increase in the supply of new homes in 2017 that has now largely been absorbed.

The second is the gulf in prices that existed between the capital and popular cities such as Birmingham and Manchester in 2016. During that year, the average London property was 3.2 times more expensive than a Greater Manchester property and 2.95 times as expensive as the average Birmingham property. Now, in 2023, those numbers sit at 2.30 and 2.32 respectively.

While UK prices increased by 62% between 2010 and 2016, they only rose by 14% in London between 2016 and 2023 - one of the lowest in the country. Now, however, most experts agree that increases are on the horizon for buyers in the capital. A prediction from Savills states, if mortgage lenders cut rates next year, house prices will start to recover from the end of 2024. 

The report also suggests that despite a drop in house prices in 2023, by 2024 London will be back on track in terms of growth with a predicted increase in house prices in prime central London of 2% in 2024, with growth of 1% predicted across the rest of the country. 

This is despite London still having the highest average house price in the country, underpinned by prime central London properties, according to the Office for National Statistics (ONS).

Likewise, we’re seeing the average annual growth recovering, with London’s average house prices increasing by 0.79% in the year on year to May 2023. While this is small incremental growth, a variety of government experts suggest it’s the early signs of a bounceback for the London market, as buyers continue to flock to the city


London Rental Market in 2024

What’s even more impressive than the increasing property prices for the city is the positive outlook for the rental market.

It recently made headlines that the average rent in London has reached over £2,500 in 2023, an increase of 13.7% year on year and is predicted to reach £2,700 in 2024. London rents are now 28% higher than in 2019. 

National average asking rents outside London have risen for 13 consecutive quarters since the end of 2019. Although the pace of growth has slowed over the last nine months, many young renters are still moving to the city in search of work and leisure that can’t be found elsewhere.


London Supply and Demand

A key consideration when looking at any property forecast is supply and demand. These are core drivers of both property price and rental price performance.

Amidst swiftly escalating prices, rental homes in London continue to lease rapidly, leaving many landlords facing substantial queues of eager potential tenants vying to view and secure properties.

Increases in the Bank of England base rate are also impacting the increase in rental prices and demand, as many potential first time buyers struggle to afford higher interest mortgages and pass affordability checks in the capital.  

The current average duration to secure a tenant for a rental property stands at just 17 days, marking the swiftest turnaround since November 2022.

Tenant demand persists, surpassing even the frenzied levels of the previous year, with current demand exceeding that of the same period in 2022 by 3%, and an astonishing 42% surge compared to June 2019.


How will London apartment prices change in 2024?

Across the UK, investors continue to choose apartment developments in major cities as they offer everything a renter needs on their doorstep - combining a high standard of living with exceptional job opportunities and easy access to jobs, nightlife and friends.

As renters continue to move back into urban areas, driven by both offices reopening and the potential to explore everything the city has to offer, apartment prices in London are reflecting that. 

At the time of writing, apartment prices in London have risen by 1.97% over the last 12 months, which translates to around £8,000. Despite being a relatively small amount of growth the demand for apartments has experienced more growth than both terraced, semi-detached and detached properties in London over the last 12 months. 

If we consider that JLL predicts London property to rise in value by 23.5% over the next four years, apartments will certainly benefit from such a large, widespread increase.


What are the benefits of property investment in London?

Aside from an extremely positive forecast for 2024, London property investment offers buyers a number of other tangible benefits.

Rising employment

Despite initial trends pointing to more people working remotely, this has now reversed in London. Employees are returning to the office, contributing to rising London demand and employment levels across the capital steadily increasing – between March 2022 to May 2023, the employment rate rose by 0.6% according to the ONS Labour Force Survey. This has a knock-on effect for buy-to-let investors, as new employees have higher disposable income and often want to live somewhere near work, which has a ripple effect on the prices of London properties.

Demand for rental property

There’s no denying that London remains an expensive property market if you’re looking to get your foot on the property ladder. For first-time buyers in the area, renting remains the only alternative, outside of leaving the city. This means the demand for quality rental accommodation continues to rise and supply remains relatively low. It’s this metric that directly contributes to rising property prices and the success of an investment in London.


London has always been a popular market for investment and despite a raft of external challenges threatening to impact the outlook for the housing market, prices have always weathered the storm. For investors, a London property market remains a relatively low-risk investment and has the potential to offer incredible returns, if history is anything to go by.


Property Investment Opportunities in London

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