How Does Rising Inflation Impact the London Property Market?

How Does Rising Inflation Impact the London Property Market?

Everyone knows that rising inflation has a substantial effect on the London property market, but few people know the actual extent of how far this effect can be felt.

There is a myriad of ways that inflation impacts the London housing industry, some of which will be incredibly useful to know if you are thinking at trying your hand at getting into the business yourself. In this article, we will be taking a look at the various ways in which rising inflation impacts the London property market, as well as discussing why knowing this information is crucial if you plan on jumping into the London housing market for yourself at some point or another. Let’s dive straight into it.

Getting Property Is Becoming Harder and Harder

Getting into the London property market has always been a difficult venture. However, it seems as though this is now more of a problem than ever before.

The property inflation rate is at a whole new level, and this makes getting involved with the market near-impossible for anyone that doesn't already have a sizable fortune.

Of course, London has always been a relatively expensive market to get into. Although, not so long ago, any opportunistic investor with enough willpower and time could get their hands on a nice piece of London real estate; but now, this is just not the case.

Barring a few lucky few that manage to slip through the cracks, London has primarily become a market for only the top echelon of investors, and property prices have now got to somewhat of a preposterous level.

That’s not to say it is impossible to break into the London housing market, and there are thousands of people that do just that. However, anyone looking to get involved has to be willing to spend a small fortune just to get their hands on the most lacklustre of properties, and this is only going to get worse as we spiral on into the future.

Inflation has made the London property market unrecognisable to what it was just twenty years ago, and unless you are truly willing to give it everything you have got in order to get a property in London, then the chances of you succeeding in this venture are slim to none.

Presents a Lucrative Opportunity for Investors

When it comes to the question of is property a good investment during inflation, the usual answer most professionals give is a resounding yes. This is because inflation works heavily in the favour of investors, and even though it may cost an arm and a leg in order to actually get a property in London, the potential returns that can come from this are well-worth the effort.

With the rate that inflation is increasing as of late, it can take as little as a few years to see a substantial ROI on even the most basic of properties. This is only amplified the longer you are willing to wait, and many people have made their fortunes solely from investing in London property alone.

The classic sentiment rings true here; fortune favours the bold.

If you are able to jump over the many hurdles that the London property market presents, it is likely that you are going to be in for a wild ride, and there is no doubt that all of your efforts will pay off.

An Aura of Uncertainty

Just like all things, inflation has to come to its natural demise. There will be a point where London properties are just too expensive to handle, and few people will even consider making an investment akin to this.

Well, this is where the problem lies. Once things reach this point, many people fear that prices will drop dramatically.

This leads to an aura of instability within the investing community, with everyone trying to both capitalise on inflation whilst trying to defend themselves against a potential collapse.

This can already be felt to some level even now, with only the wealthiest in society being able to get involved.

Luckily, this is unlikely to happen for a while, and investing in London is still an incredibly viable choice. However, this does not change the fact that fewer and fewer people are able to afford even the most basic of properties in London, and the number of investors that have enough resources to get involved is becoming smaller every day.

Conclusion

We hope we have been able to give you a better idea as to the numerous ways in which rising inflation manages to affect the London property market. In spite of the fact that many of the changes may be unnoticeable at first, rising inflation has a monumental impact on the London housing market, and few people know just how detrimental this can be to those who are unaware.

Whilst inflation isn't going to continue to rise forever, it is certainly going to play a prevalent role in the London housing market for years to come, and we have no doubt its effects are going to felt for generations. If you would like to find out more, feel free to take a look at TRPE- The Real Property Experts. We have a team full of dedicated professionals that can help you with any concerns you may have, and we can help you decide whether or not jumping into the London property market is the right decision for you.