When property consultants Savills released research last year on the location of second homes in England, it was London that came out on top. Based on figures from the Office of the Deputy Prime Minister, 27% of all second homes are now in the capital. Although buy-to-let investors have always been drawn to London, many commuters or those simply looking for a city base are enjoying the benefits of urban living and the unique cultural and social scene they find on their doorstep.
London is booming again. In 2005, the property-growth rate quadrupled from the previous year and is now at its highest level since 2001. Liam Bailey of Knight Frank Residential Research has been watching this trend closely: ‘When the price crash that many economists were predicting didn’t materialise, confidence crept back and fuelled strong demand not just from UK buyers but overseas buyers as well. In fact, more than half of all properties bought above £2m were sold to overseas purchaser,’ he comments. ‘Russian buyers have been well documented, but 2005 also saw the beginnings of wealth moving from China and India into the London market.’
The job market in London has also underpinned demand for housing. Although the UK economy slowed during 2005, there was very strong employment growth in the City especially in the most lucrative areas of the financial sector.
Mr Bailey is also upbeat about London property compared with other mainstream markets and although he predicts a steady 2.5% increase in the UK house prices in 2006, he thinks London could actually see increases closer to 7%.
This optimism in the London market is shared by William Carrington, co-founder of Lonres.com, a property data-mining company that monitors the London property market ‘pulse.’ Uniquely, Lonres.com tracks the sales history of individual properties so their data on London is more accurate than that of either the Land Registry or high-street mortgage lenders.
In an exclusive for City Life, Lonres.com has released figures charting the fortunes of London property sales over the last decade. Flats and houses have outperformed not only the rest of the UK, but the stock markets as well ? confirming that in London, bricks and mortar are still as safe as houses.