Why is London still so attractive to investors?
At LiFE, we wanted to know why London was still attracting investment both domestically and overseas. We sat down with our experts on the lettings and sales sides of our business to discover just how London’s property market is delivering profitable investment opportunities despite Brexit uncertainty.
The UK’s planned departure from the EU is creeping closer as we prepare to leave the single market behind. However, despite predictions that the companies who help support the backbone of London’s economy will flock to other EU countries, the capital is still thriving.
From finance to technology, London is a leading force in many sectors and Brexit isn’t set to stop this. Whether it’s to take advantage of the booming industries or to simply experience the London lifestyle, foreign investors are still looking towards the capital.
Jack Spellman, our Area Lettings Manager, commented on Brexit’s effect on the London lettings market:
"A lot of the panic we’re seeing around Brexit is purely media-based; London properties are still completing at a healthy rate. Our lettings department has had its busiest ever year in 2017 and we know that if a property is presented well and priced sensibly, it will let. There is still fantastic demand from people all around the globe to come to work, study and live in London. With or without Brexit this will not change."
Similarly, the sales side of London’s property market is still providing solid opportunities for those looking to invest, whether they’re overseas or domestic.
One of the post-referendum stories we’re seeing about the market is that capital growth has slowed from the perennially expected 6%, and UK auditors KPMG forecast that it will average around 1.5% until 2022. Whilst not at the levels we have become accustomed to, this is still growth and anyone who has invested in London property will continue to see their assets grow.
Comparably many foreign investors still see the London property market as an attractive investment vehicle. For example a Singaporean client will have to battle increased Government intervention and cumbersome legislation both domestically and in the well-trodden Australian market, leaving London as a viable, safe option with strong scope for hearty capital growth across the medium term.
Josh Larn, our Area Sales Manager, commented on the London property market nearly two years after the referendum:
"Whilst political and economic concerns have cooled growth levels in the short term, the London property markets’ inherent resilience make it an undeniably viable prospect. Informed investors have pushed their investment hold to the medium term and beyond whilst capitalizing on the softened short-term demand to enter the market now with diminished competition. The fundamentals remain and history is our best guide – do you know the one about the investor that bought in London and didn’t make money? Nor do I ... "
While there is some uncertainty around what the Brexit outcomes will be, London has continued with 'business as usual'.
We saw similar sales figures in 2016 and 2017, despite the doom and gloom predictions that London’s property market is going to crash. Both of these figures marked an increase from 2015’s numbers and this growth wouldn’t have been possible without a healthy property market.
Regardless as to whether it’s buying or letting property in London, the city is constantly attracting people from all around the world. Despite the referendum result, London is still booming and no matter how the Brexit talks go, it will remain a global hub of innovation with a property market that will continue to entice both domestic and foreign investors.