Throughout times of economic uncertainty and the rebound following the global financial crash, London has remained a popular destination for wealthy property investors. Why is it so desirable for luxury buyers?
London has high quality property
The quality of London’s prime real estate is a major factor in its desirability. For many European buyers in the city, London offers a chance to buy a holiday home or a second home that can be used during the week for work purposes. 13.6 per cent of the market is made up of Western Europeans, according to Savills, with a strong preference for homes with character or located in a specific area. For example a number of French buyers buy in the Kensington neighbourhoods, where there are both international and French schools such as the coveted Lycée Français Charles de Gaulle. Raising a family overseas is a big task. The first step? Securing a high standard of property to live in and the UK capital certainly offers all the possible styles to lure high-net-worth home buyers.
Suggested reading: Celebrities’ buying agent Sebastian Gibson sheds light on the intriguing tastes of affluent clients buying luxury properties in London.
London is an economic safe haven
London is an economic safe haven for investors, providing a stable place to inject their cash. As uncertainty continues in many quarters, the UK capital’s status is not set to change. Indeed, 82 per cent of investments in the City of London in the first half of 2013 came from overseas, according to Savills. Moreover, investments from the Far East surged 166 per cent in the second quarter of the year to over £1 billion.
It is no surprise, then, that Chinese and Hong Kong buyers are investing primarily in new builds – not necessarily property types they are most familiar with from their own markets - because they are investing for financial rather than lifestyle reasons (see here our article about Chinese investors in the London luxury property market). Indeed, developments such as One Hyde Park have a reputation for being bought up by international investors who do not live there. With the UK economy now turning a corner, London is a smart, steady market to bank on.
London is a key global city
With Big Ben to Tower Bridge on your doorstep, who wouldn’t want to live in London? The UK capital is a major global city – in fact, it is now the city with the highest number of multi-millionaires in the world, according Wealth Insight’s research, ahead of Tokyo, Singapore and New York. Discreet and home to high quality properties, it is an important hub of culture and business, not to mention shopping and world-class restaurants. Combined, they have helped to turn London’s iconic reputation into a rich buyer’s dream: a playground that is unbeatable fun to ride.
Photo credit: Adelto
London prime prices are rising
As demand climbs for London’s prime property, so is its value. Chesterton Humberts predicts that prime London values will climb an average of 8 per cent per year for the next five years. The UK overall will see values increase by a much lower 5.7 per cent – a sign that the capital has accelerated away from the rest of the country. With the pound recently weakening against the euro and the US dollar, the possibility to buy affordable luxury property and enjoy capital appreciation, or relatively higher rental yields, has pushed the financial desirability of London even higher.
London prime is expanding
In the past London’s prime property market was restricted to the exclusive neighbourhoods of Mayfair, Kensington, Knightsbridge, Belgravia, Chelsea, St John’s Wood, Hampstead and Notting Hill. With interest in London on the up, though, London’s prime markets are expanding across the city. Georgian homes in Kennington are increasingly popular among buyers looking for similarly high quality stock but at a lower price tag. Fulham and Battersea are up-and-coming investment hotspots too: located close to existing prime areas, high demand and higher values are spilling over into other postcodes, opening up further opportunities for capital appreciation, as well as new markets for rental income.
For all of these reasons and more, London is a popular luxury property market for wealthy buyers around the world – and that versatility will make it desirable for many years to come.
Dan Johnson is the owner and founder of the established and popular property portal - TheMoveChannel.com. Dan’s ethic is to work to live, but spends many of his living hours working. 24/7 email and mobile internet access plus a web-based business make for an unhealthy combination. To help compensate, Dan can be found at the gym pretty regularly or play football locally in London and likes eating nice food, watching films, enjoying any spare time with TV and football, playing golf and holidays.
Are you thinking of buying an exclusive property in London? Te Atrium has published a series of articles with useful buying suggestions as well as insights from top London buying agents.
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