London remains a top-ranked investment destination for international investors, competing and even beating the likes of Berlin and Paris. A major reason for this is investments that provide amazing value which leads to a higher ROI. While many overseas investors will not invest emotionally in the London real estate market, they are attracted by the numerous buy-to-let options available. Here are some other reasons why London remains such an attractive property market.
London is a Global Market
London receives investments from numerous countries including India, Russia, America, wider Europe and in Asia. Because of these different investment sources, the market is never leveraged in any one direction because it is not exposed to capital coming from one region. This helps the London market remain very stable as this diversification of investment sources helps hedge it against risk.
The investment environment in London is very friendly to investors whether they want to live in the city, have never visited the city, or are just looking for properties to invest in. Additionally, money transfers are easy and there are few barriers to real estate ownership.
Stability and Attractiveness
London is a highly ranked city in terms of culture, economy, culture, and politics. It is also considered the business and cultural capital of the world in addition to being a cosmopolitan city. All these factors work together to make it one of the most stable and attractive investment destinations for overseas investors.
The London Market Overcomes Challenges Fairly Quickly
The London real estate market has faced several challenges in recent years, starting with the turbulence caused by Brexit which was followed by the global pandemic. There are also changing market trends for investors to think about.
The pandemic changed property investment trends around the world. London saw a shift in the types of properties investors were interested in as well as the locations of these desirable properties. London adapted to these trends while also implementing various solutions that benefit investors.
The easing of lockdown restrictions coupled with vaccine management has seen employees return to work and therefore looking for places to live. This shift is driving the London market, helping properties regain their lost value and appeal and making these investments lucrative for investors who get in early.
It is important to remember that although property prices have not yet reached their previous highs, the market is expected to recover fully in the coming years.
Market Transparency
Every investor wants to have as much information as they can about an investment before putting their money into it. London provides investors with unprecedented investment transparency. This is due to the numerous studies that have been done in the past and that continue to be done every year into the city’s real estate landscape.
Numerous firms are always researching the city to find trends, lucrative investments, and factors that impact the attractiveness of the city to investors. All this data is available online if you know where to look.
The availability of all this data has helped create a very transparent market. If you would like to invest in London property, you have many resources to use to ensure you are getting the best deal. You can also use this information to predict the likely movement of your investment portfolio.
By using this data to find the right properties and to keep an eye on the overall market, investors have more peace of mind than they would have if they invested in cities where this level of detailed data is not available.
London is a Great Place to Live
London is ranked as one of the best cities to live in. This is because it is a vibrant and diverse city filled with everything anyone would want, as well as cultures that make it an interesting place to live. Its multicultural population offers foreigners and tourists numerous career and investment opportunities.
The city’s attractiveness means that, even when the market slows down, there is still enough demand for property in London. We have seen this happen in the past few years with the number of remote workers living in London increasing, driving demand for properties up thereby leading to an increase in rental prices.
Foreign investors interested in buy-to-rent opportunities should see this as a sign that there is enough potential for a great return on investment for London properties.
Developed Infrastructure and Transport Network
London is very well-connected with its infrastructure and transport links making it easy to move within and outside the city. This transportation network allows businesses to thrive in the city. It also makes London attractive to tourists and residents, all of whom need a place to stay.
Buy-to-let property options are popular for overseas investors who want to cater to residents. Investors can also consider Airbnb opportunities in the city. Different Airbnb management companies can help you meet legal requirements, be compliant with these laws and local regulations, and find tenants for your property.
Capital Appreciation and Steady Rentals
An analysis of the current property prices in London shows it is an ideal location for overseas investors. The two main reasons are capital appreciation and steady rentals. Properties in London are appreciating at an appropriate rate and will continue to do so in the coming years. Yes, there will be a few dips here and there, but the overall trend is that property value is trending upwards.
Rental stability is a function of how attractive London is as a city to live in. People move to London from all over the United Kingdom and the rest of the world, thereby becoming part of London's multicultural population. Reasons commonly cited for these moves include an inviting job market, including opportunities for remote work, and a growing economy.
Wealthy overseas property investors can take advantage of this to start earning a stable income. They can also work with partners like UpperKey who provide property management services for different kinds of properties. Their property management Holborn arrangements allow you to receive rent upfront, with Upper Key renting the whole property and then renting it out to tenants.
Innovation and Investments
The government has many schemes in place to aid innovation and investment. One example is the Research and Development tax credits that go to companies that invest in innovation and innovative solutions to different challenges. The Enterprise Investment Scheme is meant to spur investment in small businesses.
All of these innovations and investments are leading to London becoming very attractive to people who want to live and work there. The people who come in to take advantage of these innovations and investments build businesses that lead to property price appreciation in areas where they establish themselves.
Properties close to these areas see an appreciation in property value. If an investor predicts which areas the next investments will focus on, they can leverage that information into very lucrative real estate deals.
High Demand, Short Supply
Property markets, like all other markets, are dictated by supply and demand. There is a chronic supply of houses in different areas in London with restrictions on land use and construction worker shortages making things worse. This is coupled with a high demand for housing in the city due to people migrating into the city as discussed above.
Because demand will continue to be higher than supply, at least for the foreseeable future, there are lucrative opportunities for investors to take advantage of. Partnering with companies like Upper Key that understand the market will help you position your property better to leverage this imbalance in supply and demand.
Hedge Against Inflation and Exit Strategies
Inflation is at an all-time high around the world, standing at about 9% in the UK. Despite this, the London property market remains very popular. Why? Because it helps hedge against inflation. According to Savills, the growth of the London property market has been beating inflation for the past 70 years. Their data shows that property growth has stood, on average, at 2.2% over inflation every year.
Additionally, the market has never stalled and instead remained strong through the pandemic. The ability of London’s property market to help investors hedge against inflation, the attractiveness of these investments, and market stability, all provide a great exit strategy for investors.
This is because, despite prevailing market conditions, it is possible to find a buyer for your London property. Even in a turning market, the capital appreciation of the property should provide enough profit for one to exit the market with a profit.
Because of easy-to-formulate exit strategies, London also provides investors with unique liquidity positions. Real estate investors know their money will be tied up in their investments for a long time. However, they may need to be liquid to invest in other lucrative properties and investments they have seen. Being able to sell a property quickly at a great price and profit level is a key consideration for investors who want to do this. These types of investors will find London the city that provides the best options for remaining highly liquid while also holding real estate property.
Knowing where to invest, especially in real estate, is a crucial step in diversifying your investments. London remains a very attractive market for overseas investors because of its stability, ability to hedge against inflation, and high demand for different types of properties.
