People will always be interested in investing in London properties. The capital has had its fair share of ups and downs with regards to house prices over the last few years but it remains a significant location for property investors from all over the world.
Many property investors consider London to be a “safe haven” due to the strong economy of the capital, the level of employment opportunities and the positive outlook for business. It is still a firm favourite with many people as a place to live and work.
Interest from Overseas Investors
Interest in investing in London property has continued over the last six months despite the impact of the Covid-19 pandemic. There has been a great deal of interest from buyers across the world as they still see London as the best place to invest in property in the United Kingdom.
Interest is particularly strong from Hong Kong according to the latest reports. Hong Kong investors are as keen as they have ever been to invest in London. Bloomberg reported that a number of estate agents in the high end of the market have seen a significant spike in interest.
The estate agent Chestertons, claim to have received an increase in new client registrations of 80% from investors in Hong Kong in 2020. Other agents such as Beauchamp Estates and Black Brick Property Solutions report a 20% increase in enquiries from Hong Kong. Several Hong Kong citizens are looking to London as the place to permanently locate to.
What about London House Prices?
If there was one thing that you could rely on over the last couple of decades it was that the property market in London would soar. Brexit cause a bit of a plateau because of economic uncertainty but apart from that the London property market has been solid.
Just prior to the coronavirus lockdown, the average cost of a property in London was £601,562 according to data from the Land Registry in March 2020. Flats in the capital averaged at £429,401 with the average price for a detached house being £889,308.
The stamp duty holiday announced by the Chancellor has helped to induce a surge in the market again after it slowed right down during lockdown. Despite a period of inactivity, May 2020 Land Registry data showed that UK house prices had risen on average by 2.9%. In London the increase was an average of 3.3%.
Stamp Duty Holiday
Although several homes in London are valued at more than the £500,000 threshold with the stamp duty holiday, there is still the opportunity for investors in London property to make significant savings. There is a rush to secure property transactions in the capital now before the end of the stamp duty holiday in March 2021.
International investors and buyers are also rushing to get in on the act before next March. Once the stamp duty holiday has ended, foreign investors will have to pay an additional stamp duty surcharge of 2%.
London Rental Sector
The private rental market in London is a sweet spot for property investors. London has many young professionals which makes the rental market really strong. Although there are higher yields available in other parts of the country, the demand is probably the highest in the UK for renting. This leads to minimum void periods.
The Office for National Statistics show the average rental price for England to be £700 a month pre-lockdown. Average London rents are more than double at £1,425 a month. Private rents in London increased 1.1% from July 2019 to July 2020 which is lower than the average for England at 1.6%. It still demonstrates a strong market though.