London has long been a mecca for international investors. The city is one of the most established business hubs on the planet, with diversity from media, technology, banking, insurance and fashion.
People want to live there, own businesses there and visit due to the rich cultural heritage, world class schooling, infrastructure and high standard of living. Even through economic troubles, the City has always attracted continual international investment.
Capital growth in London Central has averaged over 8% p.a. over the last 15 years, even taking into account the short downturn during the credit crunch. This represents a doubling of value every 9 years.
The city boasts one of the most reliable infrastructures in the world. With 5 airports, a rail system connecting the whole of the UK, and indeed Europe, and its famous underground system makes commuting in London unbeatably convenient.
The government is also spending huge sums on the city’s infrastructure, most recently the development of Crossrail, Europes largest construction project,. Due for completion in 2017, this will transform rail transport in London and the south east, increasing central Londo
n rail capacity by 10%, supporting regeneration and cutting journey times across the city. It has already boosted property prices by upto 66% since construction started in 2009.
London benefits from a global demand for homes, but there remains a shortage of supply due to space constraints, increased population, planning delays and not enough developers able to fund and supply homes. Over the past decade London’s population has increased by around 800,000 whereas just 200,000 new homes have been built – and London’s population is expected to increase by more than 1m over the next decade. The consequence of this supply and demand imbalance therefore means high property price growth.
This combined with the cities urbanisation and technological innovation has created an optimism in the Uk market, and continues to be a safe haven for international investors, who right now, can benefit from the reduced value of the pound, meaning that London is essentially on sale, yet still offering near-guaranteed occupancy at good rental yields.
Capital appreciation is strong and rental yields remain consistent., and there are a wide range of options available to investors. A well-chosen rental investment purchase could become into a home for a son or daughter studying abroad or a second residence, whilst increasing its value and generating a healthy income.
Investment highlights:
- By 2025 60% of Londoners will be renting
- Expected property price growth of up to 22% by 2020
- Stable rental yields of around 4%
