London Property: Is Now The Right Time To Buy?

Property

London Property: Is Now The Right Time To Buy?

Is it the right time to buy a residential property in London? Sales are up and prices are down. A potentially turning market and more realistic pricing are leading the way to a surge in demand.

Published on 28 November 2017

A lot can be said for London as a property investment hotspot. In constant demand by locals and foreigners alike, the “capital of Europe” has seen property prices continue on an upward trend for decades. Hardly phased by recession and geopolitical developments, London property continues to be a safe-haven investment for many. This doesn’t come cheap, however as the saying goes, “you tend to get what you pay for”.

It’s hard to remember a time when purchasing a property in London was inexpensive – maybe in the 1970s. However, it’s all relative and prices have not only been going up in London but cities around the world. For foreigners, a weak Pound Sterling or favourable tax laws have made the city a haven for wealthy investors to park their money.

Market trends

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As Brexit lays before us, investors have begun to wonder what’s on the horizon for the city’s property market. However, there is still demand for residential property in the city on a number of different levels. If you’re a foreign buyer, a relatively lower Pound Sterling is making the city inarguably more attractive, as is a so-called bottoming out of the the Prime Central London (PCL) market according to Knight Frank. Their PCL report puts prices up in the area by 0.1%. Although, overall prices in the PCL are on average down 3.6% for the year.

Sales volume is up 12.4% in the three months up to September, which means that people are still purchasing property, but they are much more interested in getting the right property at the right price. Rather than before where many investors were buying anything and everything on the market due to it being in London. New inventory is also currently not coming to market as quickly as demand, according to Rightmove data. If this trend continues, a lack of supply is likely to push prices further north.

The importance of location

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Berkeley Group – a FTSE 100 company that is one of London’s leading property developers, having never made a loss – acknowledges that finding a location with good infrastructure is important when investing in London property. Areas surrounding the upcoming Crossrail are seeing growth. Berkeley’s property, Valiant Tower at South Quay Plaza, is within close proximity to the Canary Wharf Crossrail station. That’s good for investors as, according to Hamptons International, houses within a mile radius of any of the 40 Crossrail stations have seen their values rise by an incredible 66% since 2009 – the year construction began. The surrounding area where South Quay is located has seen house prices rise by 20% in the last year alone, according to a local estate agency.

You’re also more likely to find renters for your property if it’s located near a transport station. According to Knight Frank’s Meet the Tenants report, when choosing a property renters flock for location over size (24% to 8%). First on the list of tenants’ priorities (with 63%) was ensuring the rent was within their budget – but that’s kind of a given.

Valiant Tower is a luxury studio to three-bedroom residential building at South Quay and at 68 storeys is set to be one of the tallest residential buildings in Europe. Prices start at US$1 million and increase to just over US$2 million for the largest units which offer more than 1,200 sq. ft. That’s considerably good value for money in the area and for that, you get not only a great location but luxurious amenities such as a swimming pool, fitness centre, and the 56th-floor Residents’ Club Lounge.

Is it the right time to buy in London?

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With prices having recently risen, it may be the right time to buy in certain London areas. It’s important to choose your location, price and developer wisely. Even in a down market, all of these can make the difference between a good and bad investment. Chances are, if you foresee demand in and around an area of London, in the long-run, your property investment will likely deliver a lucrative return.

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