Why London is a prime investment destination?
London boasts a thriving real estate industry with year on year increasing property values. Below are just a few of the reasons why.
1. London is a Global Market
London sees investment coming in from Asia, The Americas, India, Russia, wider Europe as well as The Middle East, therefore London is never over exposed to capital coming from a particular region. This assists the property market to be hedged against risk. London has long been seen as a safe haven for many.
As there are no restrictions for overseas investors to purchase in London, the buying process is exactly the same as for a UK national.
Investors can invest in London regardless of whether they have a visa, have ever visited the UK before or whether they ever plan to live in the UK. The investor friendly regulations and tax regime affords buyers no barriers to real estate ownership and ease of funds transfers in and out of the UK.
The legal private property framework has stood the test of hundreds of years of time, ensuring reliable property rights and reliable construction quality.
As one of the most open and free markets in the world, many major overseas investors are more than willing to invest into Londons prestigious development projects. This has kickstarted a recent residential redevelopment boom of off-plan properties in London with iconic sites under construction.
London ranks amongst the top in terms of strength of politics, culture, education and economy. It is considered by many as the cultural and business capital of the world. Being multi cultural, cosmopolitan and the English language have all played their part in creating an environment most attractive to invest capital and work. This has led to London becoming one of the cities with the largest number of billionaires in the world as well as a safe the safe investment paradise for the world’s richest.
The UK property market has become extremely transparent due to the abundance of independent research, industry scrutiny and data which is available at the click of a button. This has served to create an easy to understand and transparent property market. Jones Lang Lasalle has ranked the UK as the 3rd most transparent real estate market globally.
The regulatory framework within the UK is investor friendly and has no barriers to real estate ownership nor to the transfer of funds in and out of the country.
3. Investment and Innovation
The government runs many schemes to increase investment and innovation such as Research and Development tax credits designed to reward companies investing in innovation, the Patent Box scheme and the Enterprise Investment Scheme designed to encourage investments in small companies.
London claims to be one of the most competitive cities in the world. A financial and business hub with unrivalled transport links. London is already home to 5 international airports and a famous tube network. Further developments and investment schemes have been put into place to improve transport even further. The Crossrail, which is a high speed train linking Reading to East London is a prime example of this. It is set to drastically improve London's connectivity. It is already estimated properties close to a Crossrail station will see increased prices upon completion of the scheme.
Investing in real estate has become even more competitive due to the devaluation of sterling, and investing into sterling out of other currencies has become a popular movement. The Pound is currently close to a 5 year low against the US Dollar. This has drawn a lot of attention to the UK from the GCC due to the US Dollar pegged currencies.
Dollar pegged investors therefore have more purchasing power and will not only benefit from capital appreciation but also from the rise in the exchange rate. The pound did rally and strengthen after the elections hailing a victory for Boris Johnson however the rates are still at a low as we go through the transition period.
The London property market always features an exit strategy, even in the worst of market conditions there is always a buyer for a property. One of the most coveted property markets in the world is London's. Therefore it provides a safe and stable secure haven relatively shielded from global fluctuations.
The London property market is one of the most coveted investment markets in the world. Relatively shielded from fluctuations in global markets, it provides a safe, stable and secure haven in which to transact. Capital appreciation is strong and rental yields remain consistent. Investors are faced with a wide choice of properties and areas in which to choose from, meaning that investments can be tuned specifically to adapt to client need. A well-chosen initial buy-to-let purchase can morph into a home for a son or daughter studying abroad or a second residence, whilst increasing its value and generating a healthy income.
6. London’s public facilities and universities
London is a city full of heritage and culture. Subsidized museums, libraries, royal parks, historical and cultural attractions. The Tower of London, Buckingham Palace, Houses of Parliament, theres never a shortage of culture in the capital. Theaters in the West End, football clubs and many more daily activities.
Many investors buy properties in London in order to be close to some of the worlds best universities and to be immersed in the rich historic culture and prestigious educational establishments.
7. Low interest rates & Increasing House Prices
Interest rates are currently at an all-time low, allowing you to pay off your mortgage faster than before. It has been recorded by the ONS House Price Index that average property prices in London double every ten years. Giving investors a huge potential for resale at a higher value.
8. Still in short supply
With chronic supply shortages, rising barriers to entry for developers, a severe shortage of construction workers and restrictions on available land, prices will continue to rise as demand outstrips supply for the foreseeable future.
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