Not too long ago it was reported that European investors were the most active of all the overseas buyers purchasing a property in London in the first half of 2020.
For the first time since 2011 European investor activity superseded investment activity by AsiaPac investors.
International real estate firm Savills shared that their research which highlighted European Investment accounted for almost 40% of all activity in the first half of 2020.
Why the spike in interest?
A recent annual survey of 1,000 of the world’s largest property investors, developers, lenders and advisers ranked London second behind Berlin as the top city for property investment. Last year London was ranked fourth after Paris, Berlin and Frankfurt.
Investors are actively buying property again as it is one of the only assets that offer reasonable returns in a world of low and negative interest rates.
Viewed as a global investment safe haven with a stead economy, London was voted one of the best places to invest for its good liquidity and the fact that Brexit-related discounts were available, though Brexit is no longer seen as the greatest threat to income security.
Prime London property
Perhaps the most exciting part of the London property market in 2020 is the Prime Central area. London’s most exclusive homes are currently available for the lowest values in 7 years – some buyers have been able to snag deals not seen since the financial crisis.
These trends buck the reports that nationally prices have risen by over 7%, sold prices in prime London postcodes had fallen by 3%.
This opportunity in central London is expected to be short-lived and you have to have exceptionally deep pockets to be able to make the most of it. Agents working in the area report that you can currently buy a house that would usually cost £40m for £30m – institutional investors are notably active.
The outlook for 2021
It’s likely that 2021 will see the property market in London find its feet and the expectation is for the prime central market to recover as soon as international travel resumes.
Whilst prices have risen in the country property markets as home movers sped up their plans to swop their urban lives for a rural one to make the most of the stamp duty holiday.
Rental yields in London remain low compared to other locations in the UK and the prices considerably higher despite and current discount.
Outside of London locations that are undergoing regeneration and seeing improvement to infrastructure have the greatest potential for savvy investors.
Manchester, Birmingham, Liverpool, Newcastle and Preston should be on every investor’s list of considerations as places to invest in 2021 for a wealth of reasons.
Talk to a member of the team about your plans for property investment – We’re available on +44 (0) 2039507939 or email us at info@thirlmeredeacon.com
