The British capital’s robust property market makes it a solid bet for investors
Across the Atlantic from New York in London, it’s still a complicated picture. Andrew Bridges, managing director of London real estate agent Stirling Ackroyd, believes the UK capital maintains a strong magnetism for international buyers.
“London’s global reputation speaks for itself and attracts a wide range of buyers. For investors it’s certainly one of the safest global choices – London property prices are in a league of their own and demand is constant,” he says. “In the West End, our figures show the average property value stands at USD1.47 million, an expensive investment but one sure to increase in value in the future.
“London is only growing further as a truly global business centre, remains the number one centre of finance and technology for the whole of Europe – plus has increased air capacity on the horizon.”
Bridges concedes that in the last six months, there has been a “small decline” in the numbers of Asian buyers purchasing property in London, but he puts this down to “economic hiccups” in China.
“In the face of an unpredictable global economy, London is a natural safe harbour as well as a base for business operations – so Asian investment in London property is likely set to rise whatever the economic weather.”
Others are less enamoured with the general state of play in the famous old city – largely because of that 12 percent “stamp duty” tax on high-value properties.
“Higher taxes means lower volumes, and yet more pressure on the property market. When will the government get it right?” he complains.
“Until taxes are reduced, the volume of transactions will remain low, meaning available stock levels are low as people cannot move within the market,” says Alex Newall, managing director at London-based real estate agent Hanover Private Office, which specialises in the super-prime market.
However, that lack of movement means there are opportunities in London for the smart investor, says Newall. “The trophy, best-in-class properties will hold well, but those which are compromised whether that be in condition, layout, location or financial ability to hold will allow savvy investors to unlock some very special deals,” he explains. “It is an exciting time to buy in the next three months. Our recommendation is to buy well, and hold.”
London’s sphere of prestige has spread out to neighbouring regions such as Surrey, explains Newall. “The international appeal of prime central London and prime pockets of Surrey are both fuelled by the seemingly insatiable desire of the world’s wealthy elite for exclusivity,” he says.
“In the last 12 months alone, Asian purchasers have spent well more than USD300 million on Surrey properties and plots – some of which come with planning that allows the purchasers to ‘bespoke’ the properties to their exact specifications..”
Meanwhile, some Asian buyers are looking further north – and further into the future – to the UK’s second city, Manchester. It might have long been historically less affluent and glamorous than London, but many investors are banking on the UK Government’s regeneration pledges and infrastructure improvements in this area to reap dividends.
“Manchester is also a lucrative investment for Asian buyers,” says Gordon. “Its thriving economy, boosted by the [UK Government’s] Northern Powerhouse initiative and President’s Xi’s visit this year, means prices are up by more than 6 per cent in the last 12 months, delivering that value and opportunity to investors that may be scarce in the capital.”
Source: Property Report