While most of the country has benefited from an increase in house prices, nowhere has been more pronounced than in London. according to a spoke person from Innovoproperty. With some reports claiming that house prices will soar everywhere in the next five years – with increases in London predicted to be the highest at 9.3 percent per annum, it seems that London stands head and shoulders above other areas of the country. If such predictions prove correct, this would put the cost of the average London home at £570,000 by 2020.
The fact is that anyone can throw statistics around. By how much prices increase and at what rate per annum remains to be seen – particularly with interest rates likely to rise during the next six months or so – prices could well cool off. However, one thing’s for sure: bricks and mortar is largely a safe investment – at least in the very long-term. Here are a few reasons from LDG estate agent in Central London as to why we believe London is still a very safe bet when it comes to investing:
As we all know the population of London is going only one way (perhaps similarly to house prices) and that’s up. Due to rise by 800,000 in the next decade, there are very few properties being built. This is because of a number of factors, such as bad planning regulation. Hence there are lots of people with nowhere to live, meaning that there’s a shortage of supply in comparison to demand. Interestingly, very few houses or one-bed roomed flats are being built – so for single people and families it’s harder to find properties.
Flood of money
Due to the stable legal framework and competitive tax regime in the UK, there’s been an influx of money into the London housing market – particularly because of international turmoil. Many companies and rich individuals can operate from London and the multicultural environment can often make them feel at home. As well as this, many foreign billionaires find their tax treatment rather favorable and of course there’s the entertainment factor – London’s a world class city and interesting place to live.
If we take economic growth as defined by Gross Domestic Product (GDP), the boom in population and employment has led to the UK economy recovering in comparison to its European counterparts. With some figures demonstrating that wages are increasing and the International Monetary Fund (IMF) claiming that Britain is one of the world’s fastest expanding economies after predicting a surge in growth of 3.2 percent by the end of the year; London’s becoming more and more attractive as one of the more buoyant economies in the Eurozone.
As the place where everyone wants to live, London is never going to go out of fashion. Of course, prices could well stabilise – and if interest rates go up and/or a mansion tax is introduced, they could always move slightly downwards. Although we think the upward trajectory will continue – albeit at a slower rate – it’s important to bear in mind that anything can happen.
Good luck with your investment! We’re fans of London because we think it’s the best city in which to work and play and that London property is an excellent investment. But of course, we would say that, wouldn’t we?