Renowned for its global standing in terms of business and trade, amenities, quality of life, facilities offered and stable legal and political systems, London is a most high-profile location for property investment across the globe.
Other reasons which make it an attractive place to live and work include its time zone, use of the English language, historical and global ties, world-class educational system, access to the financial markets and transparency of property tenure. London is also the top city in the world for the number of multi-millionaires – 4550.
Despite political and economic uncertainty as a result of the UK’s vote to leave the EU and the subsequent snap General Election in June 2017, the factors that make it a premier world city remain unchanged over the long term.
London will remain a key economic and cultural centre and will continue to be the preferred global destination for people to invest, work and live. In its prime property market, strong international capital inflows have historically been important.
It remains very competitive on the global stage when the costs of purchasing, holding or selling property are considered, and it remains less expensive than New York, arguably London’s main competitor when it comes to international property investment, as well as Hong Kong, Tokyo and Singapore.
In light of the EU referendum vote to leave the EU, the market remains exposed to fluctuations in buyer sentiment. In the short term, the market has experienced a boost from a weak sterling, presenting an opportunity for international buyers. In addition, interest rates are still at an all-time low (despite a small rate rise to 0.5% in November 2017) and any further rate increases will be incremental and gradual.
As Brexit negotiations continue through to 2019 the UK government will be highly motivated to continue to protect London’s position as a major global financial centre.
The Pam Golding Group expects a return to growth once negotiations come to an end as pent up domestic and overseas demand returns to the prime markets. Over the next five years a positive capital value growth of 20.3% in prime central London and 10.2% in outer prime London is expected.