Why Invest in London?

Our philosophy when investing has always been, concentrate on local affordability, and rental returns - and it has always done well for us - even with some of our personal portfolio dropping in value over the last 4 years, the rental returns have stayed strong, and passive income is stronger than ever.

To get local affordability in the UK - you are looking for properties under £125,000 in most of the country as the average salary is around £24-25,000 – however the London market is operating under different rules.

Clearly the South East of the UK, led by London, has continued to have strong success in 2011, and looks to continue to in 2012. A large amount of this has been led by foreign investors who have been desperate to invest in "safe" property markets, and there is no doubt with the pressure on housing in the South East, and the growing population, we expect this pressure on prices and rents to continue.

The London property market continues to be hot – with many yields being pushed down to under 5% - so to secure properties with 6.5-7.5% rental yields is getting very tough to do.

Naomi Heaton, chief executive of property investors London Central Portfolio, said: "Average prices in prime London central now stand over 15 per cent above the pre-credit crunch peak.

"It is clear that investors still recognise the value of London's premier real estate as a safe haven investment as well as a hedge against inflation and instability elsewhere in the world."

House prices in the capital rose in December, even as those elsewhere in the U.K. stayed flat or fell, says the Royal Institution of Chartered Surveyors. Prices in prime central London are now around 16% higher than their September 2007 peak. Some forecasters predict further 25% rises by 2016, as foreign investors continue to seek safe havens for their cash.

London house prices are today forecast to rise by almost a fifth over the next five years, outstripping every other region of the country.

The capital's property market is expected to remain the most resilient in Britain with the biggest rises seen in the most sought after central London neighbourhoods where they could go up by as much as 23 per cent, according to Savills.
The forecasts, from agents Savills, mean that a £500,000 London family house could be worth close to £600,000 by 2016.

Prices are expected to rise much more slowly or even fall outside London, a trend that is deterring thousands of families from making the move to the countryside.

Yolande Barnes, director of Savills residential research, said: "Despite the widening gap between London and the country, Londoners seem increasingly reluctant to move out and there has been a 24 per cent drop in such relocation activity
A continued depressed sterling rate will also buoy international purchases, Hamptons claimed in its ‘2012 Forecasts’.

It predicts a 5% increase in prime London rental prices, compared to 3% for the whole of the capital. The south of England will experience just a 2% growth, Hamptons claims.

“We are expecting the rental market boom to continue in Prime and Greater London, driven by a continued imbalance between supply and demand,” according to head of lettings Lesley Cairns.

“For the first time ever, the private rented sector will house more people in the UK than the social rented sector, which will put continued pressure on prices."

The rental market is so strong - I have seen this first hand - and so we have spent the last 4 months building up contacts here and now are in a position to start offering opportunities here on a more regular basis in 2012.

The key points will need to be the same as any of our deals:

• Below current comparable values – between 15-30%
• Minimum 7% rental yields

We will generally still be aiming for under £175,000 in the South East - to allow us to hit these targets – although we know we have some clients with specific strategies and specific postcodes in mind, which will be at higher value – and we are equally able to source these opportunities.

Opportunities in the South East are clearly much tougher to secure, and go far quicker, as sellers generally do not need to sell at discount!

To register for full investment packs on our London, and South East opportunities, enter your details here

To discuss investing in the UK, with an experienced Portfolio Development Manager that can advise you accordingly call us on 0115 9853963 today.

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