London Property has been a pretty safe investment for many years. The British Capital is an international economic hub with a strong financial outlook and a busy jobs market – it’s a prime location as a place to live and has attracted both residents and investors from all over the world. 2020 has been a challenging year across the UK economy. From the uncertainty in the past couple of years that has resulted from Brexit to the changes that have been required as a result of the coronavirus pandemic there has been plenty to process. So, what’s the latest when it comes to London Property?
Investment
Despite lockdown conditions dominating the spring and early summer, over the past six months investment has still flowed into London property. Overseas buyers have remained especially keen on property in the Capital and recent reports have suggested that there has been particular interest from investors in locations such as Hong Kong. This is backed up by evidence from estate agents, some of which have seen as much as an 80% spike in interest from potential Hong Kong investors.
House prices
Prior to lockdown earlier this year the London property market was strong and experiencing a rebound after the uncertainty that affected property values as a result of Brexit and the lack of a deal on the table for the UK. In March this year the average property in London cost £601,562. Since lockdown, transaction data for London property has not been that easy to come by given the halt to buying and selling that resulted from the majority of the UK population being advised to stay in their homes. However, from May onwards we do start to see an uptick in London property prices, with an increase of 2.9% on the figures from the year before. In the year to May 2020 London property values increased by 3.3%. While there is still a great deal of uncertainty over COVID and future lockdowns, there is clearly an appetite for property in London that remains in tact.
Government changes
Earlier this year the government announced a Stamp Duty holiday for properties worth up to £500,000. While there are many properties in London that sit above this threshold it’s still thought that this change will make a difference to whether some buyers have the motivation to go through with transactions. It may also mean that activity increases within the London property market as buyers look to ensure that deals go through before Stamp Duty goes back up again in March 2021. For overseas investors there is another good reason to jump into the London property market now, as opposed to later. From March 2021 there will be an additional 2% to pay on Stamp Duty for those who live overseas and are looking to buy property in the UK.
The London property market has been hit in the same way as the rest of the economy by the COVID activity this year. However, all the signs are that the green shoots of recovery are already visible.
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