Money to invest? Consider London property

If you are looking to carve out an international property portfolio, London is a great place to start. Despite the difficult economic conditions in Europe, London is still considered somewhat of a safe haven when it comes to domestic property, though recent growth levels are a little more subdued than those of the past.

A recent report from international real estate agent Savills shows that the prime London market enjoyed growth of 0.9 per cent in the second quarter of 2012. However, annual price growth for the year stood at six per cent, the lowest level since September since 2009. This would suggest that heat is starting to come out of the market a little, but experts from the firm insist London is still a solid investment option.

“It is now three years since the markets bottomed out and we’ve seen a period of intense activity and price growth, but it now seems unlikely that the market will have the capacity for further price growth in the short term,” said Lucian Cook, director of Savills research.

Those looking to enter the buy-to-let market should find strong demand in London, though the demographic of the typical renter has altered somewhat in recent years due to economic shifts. The increased availability of prime London rental properties, which has in part been driven by overseas investors bringing more options to market, has suppressed rental growth. That said, demand for city center accommodation remains high, and there are many investment groups offering investment property information and tips for long-term profits. Although there are fewer corporate lets from firms in the financial and business services sector, high property prices mean demand from young professionals is booming and buying investment properties with the aim of targeting this group may therefore be a wise choice. You could also go to a House Buyer Bureau for advice and help.

Mr Cook explained: “The profile of tenants has changed as a direct consequence of weakened sentiment, with a notable decrease in big ticket tenants employed in the financial sector in the prime central and east of City markets of Canary Wharf and Wapping. As such, there are a number of new and increasingly localized market forces being seen in the capital.”