The property market in central London – apartments and houses both to rent and for sale – has remained not just buoyant through the economic downturn but continues to show signs of growth that extend as far back as the mid-1990s. A report commissioned by Development Securities PLC and carried out by Fathom Consulting found that prime central London residential prices are currently tracking at a record six times multiple relative to the rest of the country.
According to the report, there are three principle reasons for this continued growth: global equity prices, the relative value of the pound and the safe haven status that central London property boasts. The lattermost of these factors appears as the main driver in the growth, the study concludes that “foreign money seeking a refuge from wider economic difficulties has been key to the increase in prime central London property values in recent times, and accounted for 60% of acquisitions by value between 2007 and 2011”.
The fact that the buoyancy of the property market in London has defied not just the national backdrop but the global scenario over recent years, factors that have seen less resilient markets struggle, only adds to the attraction of investing in central London. Apartments as well as houses in prime central regions such as Kensington and Mayfair are occupied by foreign residents at over a 50% rate. This figure matches up with levels of foreign ownership of prime City office buildings, as was found in a different study by Development Studies last year.
There is, of course, no saying what the future holds, particularly in such uncertain economic times. But for now, prime London properties in central regions continue to attract interest from overseas investors. This incoming investment creates the sort of competition that should drive the growth that has existed over near-enough the last two decades.
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