Investments in real estate of London pursue the ultimate goal – getting pure dividends from the purchase of a residential facility. To date, the profits can be made on reselling real estate at the time the highest price increments, as well as providing the facility for rental. In this case, the investment will pay for itself slower, but guarantee stability for the long term.
Among international investors residential objects of the secondary market (cottages, townhouses, detached villas and apartments) have a higher priority. As a rule, they choose these investment objects for the sake of a potential yield. The greatest potential for profitability is determined by the annual growth of capital. On this basis, more than 67% of real estate investments in London enters the objects of elite sector. According to solicitors.guru, a legal hub allowing you to find a solicitor of any specialisation, London’s conveyance solicitors mention the following numbers: the minimum cost of such facilities in early 2015 ranges from £1,200,000. The average market prices for real estate are considered to be premium in the amount of £3,500,000 – £ 4,500,000. However, about 47% of all investors prefer to invest in more expensive objects – property at the price of £6,000,000 – £7,000,000.
This interest in the elite residential sector is triggered by the most intense price increases, which correspond to 10% – 12% of annual growth. This rise in prices makes it possible to gain pure earnings by resale real estate taking into account the difference between the initial cost for the purchase and the final amount of the item at the time of sale.
In this regard, investment in real estate in London comes to the maximum extent in the central regions of the capital. Housing stock in the central area is 90% formed of elite competitive objects. The highest concentration of real estate with a high potential yield is focused in the districts of Knightsbridge, Mayfair, Belgravia, South Kensington, Notting Hill, Westminster and Chelsea.
According to data from Dataloft experts, Mayfair is gaining particular interest at the moment. This area now has the average market price of £60,000 per square meter of living space. By 2016, experts expect a capital gain to £120,000 per square, and by 2020, the Mayfair property may become the most expensive in London at prices up to £160,000 per square meter. Talking about the most liquid real estate at the moment, we should focus on the secondary residential market of Belgravia. The average price of luxury residential properties in this area reaches £10,000,000. Investments in real estate in London, in this case may bring the profits and returning the object in rent because the tenants indicate that they are willing to rent a property in Belgravia at a price of £ 45,000 per month.
At the same elite sector is characterised by stable growth in prices, which minimises the risks of investment. Even in a period of stagnation (2009 – 2012 years), the elite real estate in the fashionable areas was sold at a price 5-7 times exceeding the average market. Now, the price gap is even more pronounced.