Why invest in London?

London real estate is a first class asset for international investors due to continued role of London as the leading financial centre, low tax regime for international buyers and the stable political, economic and legal system.

Best European City for Business

For over 15 years London has been recognised as the best European city for business. 75% of companies from the Fortune 500 are based there. London is also a cultural and educational capital. There are 200 museums, 5 symphony orchestras, 2 opera theatres and 150 theatres.

Tax advantages for non-residents and non-domiciled residents, exceptional quality of British education, convenient time zone and stability represent a significant London advantage. These are few of the reasons why over a third of all property purchases in London are acquired by foreign investors.

Investment potential

The London residential property sector still offers great potential due to an inherent shortage in supply of new homes and an increasing demand for high-quality rental accommodation. The supply/demand imbalance is simply not going away and is even showing signs of worsening with the official shortfall in properties being built versus demand of 100,000 units per year.

Commercial properties continue to represent good value, with yields averaging 5.5% across office and retail sectors. London commercial rents have returned to growth, underpinning the strength and solidity of the investment thesis.

High GDP, employment and improving infrastructure to prepare for 2012 Olympic Games contribute to the fundamental value of the London property.

Diversification into a stable market

London property (residential and commercial) is one of the largest and historically best performing asset class. It provides excellent diversification benefits, particularly in a high-inflation economic environment.

Real estate is a tangible asset – ‘an investment you can walk past’ - in a market which most investors know and understand. This gives a greater sense of control than leaving the responsibility for future financial provision to an anonymous fund manager in the City.

Posted: 21 February, 2011.