Rental or Real-Estate growth in London has risen at a very fast pace for the past 18 years. This year sales in the first quarter grew by 41%. As a result of this sky rocketing real-estate price increase, there is an eminent shortage of real-estate which lead to price explosion in this sector.
In October 2006, the prices sky-rocketed by 2.1%. Renting a six square metre apartment in Notting Hill costs about 800 Euros per month. Real-Estate Agents advertise this by slogans like “tiny but trendy” and are ideal for someone who has an active social life outside. A property which cost about £100,000 about 30 years ago would cost about £3.5 million today, which translates into exponential growth.
Real-Estate growth in London and the UK of Great Britain and Northern Ireland are boosted by four factors:
- Immigration and population growth have been strong, especially in London.
- Interest rates have been at record lows, with a large expansion of the money supply through “quantitative easing”.
- The City of London continues to boom.
- Construction activity remains weak.
Since the 1950’s London has had high immigration rates, especially from former colonies. Due to the high immigration rates, London’s population today is multicultural and increasing. Today, London is the richest city in Europe, and the finance intersection between New York and Tokyo. Due to diversified jobs and the fact that salaries are 20% higher when compared to the rest of Britain, London is a very interesting place to live or work.
The Real-Estate Economy in Europe and London
According to the property clock of real-estate growth, London is in the phase of accelerated lease price growth. London is the first European city that reached this level, but the figure shows that the trend of the European market follows London, in some countries faster than in others. According to the consensus estimates of leading financial institutions, the current economic growth in Europe is about 27%.
Best Places in London to buy Real-Estate Property
London is one of the most vibrant cities in the world with one of the largest populations. As mentioned, real-estate properties in London are some of the most expensive in the world, with the mortgage market in a stranglehold; there are real difficulties buying property in London. Demand for rental property is incredibly strong throughout the city, causing high demand for investment properties in London. There is also a lot of speculation about a bubble, which allegedly may burst any-time.
To name one specific area that is better than the rest would be like picking up a rabbit from a hat, but it is not a hard formula. Usually it is good to look for an area with a growing industry, showing strong employment growth, a growing affluence and good transport facilities. Things like good schools and hospitals in the vicinity could also be a bonus reason.
If it had to boil down to one area, then your best bet would be Pimlico, which is a central London site, separated from Belgravia by Victoria Railway station to the north, from Westminster by Vauxhall Bridge Road, and bounded by the River Thames to the south. With easy access to the Victoria line, good bus routes and riverboat services to Waterloo and Southwark, this area is a commuter hotspot. Pimlico is a lovely little village in London. At the time of writing, it is better to invest long-term in London Real-Estate, than short-term. Pimlico’s Stucco houses line the well-looked-after streets, with the manicured lawns and trees. Property is not very cheap but still has high occupancy due to strong growth in rents and values.