Planning & investing early for your child’s future in a Zone 1 London investment property

As parents, we often wonder how much we need to prepare for our children’s future education, whether it is for their school fees, housing, lifestyle or cost of living expenses. We shudder to think about the future cost and how far our Ringgit can stretch to provide the best for our children.

If you intend to send your children abroad for better education and exposure, the UK is one of the top spots. A total of 679,970 students have flown down to the UK to further their studies (2021/22 data [1]) and 1/3 of them are in London (33.9% based on 2021 statistics [2]), with the rest living across the entire UK.

With our Ringgit slowly going through devaluation, coupled with a yearly inflation rate, the cost of living in the future is set to be different to the value we are paying now – even in the UK. We all remember the good old days when a property in Damansara was selling for RM200,000 30+ years ago, to now asking RM1,300,000 for an old landed property (excluding renovation cost). Property prices in the City of London have also grown in value over the last ten years as Central London expands, increasing 89% in value from £492,810 to £931,090 [3].

Investing for both rental income and potential own use

We often get questions from parents who want to buy property in Zone 1 for their children to use but often find themselves in a situation where the price is not within their reach. However, with proper planning and staging out the cash flow and help with financing, many find themselves able to afford real estate with proper guidance and advice on rental income. The right advice can supplement their investment returns for the first few years before they take back the property for their own use.

We also often hear that Zone 1 London yields are low. However, there are many opportunities in Zone 1 pockets which can give you value for money and potentially up to 5% rental yield or more, with the opportunity to grow further. As London has the highest asking rent in the UK, even if your children are not studying in the city, the rental income can be used to supplement their education fee, cost of living, rent in another country or other UK second/third tier cities/towns.

Private homes rent rates in Central London (April 2024)

At the time of writing this article, one would be expected to pay the below monthly rent in a privately owned property in Central London. These rates may differ based on the time it is available, the location and the type of development:

● Studios: £2,000 (RM12,000) per month
● 1 bed: £2,500 (RM30,000) per month
● 2 bed, 2 bath: £3,500 (RM42,000) per month

Some developments/areas could ask for more than the above rates and finding this investment opportunity can be daunting. As Central London agents, we have seen this region expand over a few decades since our establishment 65 years ago – with more people preferring to live closer to the City for a shorter commute and to be close to their studies and workplaces.

If this is what you are aiming to plan for your children’s future or to diversify your MYR in a yielding property in GBP, come join us at our upcoming Zone 1 Yielding Collection showcase, which will be held on 27 & 28 April 2024 (Saturday & Sunday), from 11 am-6 pm, at the Majestic Hotel KL, Majestic 9 room, to learn more.

Click here to register.

Investor insights & advice

We will have a sharing session at 2:30 pm on both dates and will touch on the main key factors below:

● Cost between renting and buying
● Utilising financing options to achieve your goals
● Where to invest in Zone 1 London that can give you high yield

Our Malaysia office is situated in Sri Hartamas, Kuala Lumpur. If you are interested in booking a private appointment, please feel free to contact us using the contact information below.

Benham and Reeves Malaysia
A-01-10, Plaza Damas 3 Block A, Jalan Sri Hartamas 1
Sri Hartamas, Kuala Lumpur 50480
(+603) 6211 6478