What can we say or predict about the London property market in 2012? London property investment has always been popular, with buyers coming in from around the world. But this trend has increased during the downturn, as fluctuations in currency exchange led to foreigners getting up to an additional 20% discount on London investment property, which had already seen prices collapse.
The UK is a small island nation with a growing housing shortage, and because of this prices have been known to always rise over the long term. Nowhere is this truer than in London, and particularly in the prime segment in and around central London.
But that is a flimsy and overly cautious paragraph of drivel right now, why? Because London is to host the 2012 Olympics, and events like that boost economies and property markets for many years and London will be no different.
Between now and the lighting of the Olympic torch one can safely predict a massive increase in investment in the city, in the infrastructure, public transport, new attractions and more. This will generate jobs, but it will also lead to increasing demand for commercial and residential properties to buy and rent.
But what about when the party is over? At the time of the Olympics there will be much greater demand than normal and people willing to pay much more for accommodation in a central location, so it is almost certain that investment properties London will make a good income during the period. But what about when everyone goes home, are we looking at oversupply?
In our opinion there is little chance of oversupply in the market. We believe this because, as was said above there is very little room for new building in London, so buyers and renters simply get into bidding wars over existing stock. This is why prices in London have risen consistently since the middle of 2009, while prices in the rest of the UK have ridden a rollercoaster.
On top of that the work done developing the infrastructure will make London more popular as a place to holiday, live and open businesses, which will benefit investment property in London over the long term, by maintaining high demand for commercial and residential properties to buy and let.