Why now is the time to buy property in London

Thanks to a weaker Pound there hasn’t been a better time in years to invest in England’s capital.

Henry Faun, Knight Frank Middle East November 15, 2016

The last six months have presented a significant opportunity for investors in the UK as well as the UAE. Brexit, for better or for worse, has enabled property investors a unique window to benefit from a weakening Pound Sterling against Dollar pegged currencies.

In the eight weeks post-referendum, we saw newly registered buyers increase by over 22 per cent and properties under offer increase by 19 per cent versus the same period in 2015. We called this the ‘Brexit bump’. 

London has always been, and foreseeably always will be, a safe haven for international property investors to preserve their capital. With the growing global population, there are also a growing number of affluent individuals who have the means and desire to invest internationally. 

Within this existing economic climate, now is a very interesting time to explore the UK property market with great opportunities in both central and outer London. The exchange rate presents a fantastic opportunity to make the most of a relatively weaker Pound Sterling. According to Knight Frank’s Wealth Report, London remains at the top of the global cities for high net worth investors in 2016. 

In central London, areas such as Blackfriars have high quality housing stock, a riverside location and proximity to established high value locations and are benefiting from significant investment in and around the City of London. Similarly, outside of central London, there are some considerable opportunities to invest in undervalued locations with strong commuter links to the central areas, such as Staines-Upon-Thames.

The English market has been operating in a two tier system for a number of years, with the growth of London and its outer boroughs rising in capital value at a quicker rate than the rest of England. More recently, there have been changes in the tax associated with the purchase and holding of English residential property that has limited the volume of transactions of properties at the higher capital value levels. 

Many of our British investors based in the region are looking at owning properties back home and we’ve seen an increasing trend in Middle Eastern residents looking to get into the UK property market.

We recently hosted a sales event for the London Square: Staines-Upon-Thames project in Dubai to provide our UAE residents the opportunity to open a discussion on this fantastic investment project. The project is situated next to the Thames, and near to Royal Holloway University, Heathrow Airport and Wentworth Golf Club and is just a short 35 minutes to Waterloo by train.

Prices start from £340,000 – about AED 1.5 million – with forecast yields up to 4.4 per cent. Undervalued areas such as this, really do offer an excellent investment opportunity and with the recent election news from the US, keeping a close eye on currency changes may present even more opportunities to take advantage. 

Henry Faun is an associate partner at Knight Frank Middle East.