Oldypak capital lp did a research about property market in the UK. Here are some conclusions. The property market in the UK has a life of its own: it is little affected by the global economic crisis – especially for prime London real estate, which is always in price. Property in the English capital is becoming more expensive than in other parts of the country, and is more expensive than in most other major European cities.
Investment properties in London – such as office buildings, commercial properties, student hostels – are in steady demand from investors around the world. Russians also prefer London real estate – and over 85% of investors buy properties in the central London area, where property is most expensive and attractive from an investment point of view.
Analysts agree that UK property will continue to delight investors with rising prices and its popularity will only grow. Thus, 2013 was already a significant year for the UK property market – house prices are rising across the country, and by September the average cost of residential property in England reached €202,000, up 5.4% year-on-year, and prices are likely to continue to rise, providing investors with a stable income.
UK property market outlook:
1. Growth in demand and prices of real estate in England will continue, and the maximum growth will concern real estate in London, including commercial properties.
2. Increase the number of primary buyers of housing due to the initiatives of the local authorities which keep the interest rates on loans low and develop a special program to support buyers, that ensures the profitability, safety of buying property under construction in England. Thus, in July 2013 the number of investments in property under construction jumped by 45% compared to the previous year.
3. luxury real estate in London will become even more expensive – only for the last four years prices have increased by 57% and, according to analysts’ forecasts, by 2018 the best square meters of London will rise by another 26%. Also in 2012 London authorities raised taxes on the purchase of luxury property. Stamp duty for properties worth two million pounds (€2.48 million) and more was raised from 5% to 7% – this will slow down the growth of prices to some extent, but not for long as demand remains high.
4. Property in London will cost significantly more than similar properties in other regions and cities in the country. By mid-2013, the average price of property in London was €370k – 5% more than in the pre-crisis years 2007-08 and almost twice as expensive as the rest of the country.
5. The proportion of investment in student property will rise – it is now the most promising property sector, boasting high demand and profitability.
6. London will cease to be only a place for millionaires – in recent years there has been a trend of increasing requests from foreign investors to buy relatively inexpensive properties in England.
7. The proportion of Russians among foreign investors will grow – and the emphasis will shift to commercial real estate in London.
8. Many new properties will be built in London and the suburbs until 2021 – at least about 800,000 homes are needed to cope with rising demand.
9. Over-saturation of the real estate market in England is not expected in the next few years – the shortage of supply, together with a strong interest in buying London real estate by locals and foreigners should contribute to a further increase in prices.
Thus, real estate in the UK has been promising and attractive to investors, and will remain in the future the highest priority area for investment in real estate.