Why Invest in london?
London has been chosen as the number on global city for foreign property investment. While the property market has struggled in several areas over recent years, the London property market continues to flourish and is set to see an increase in property prices and rental yields for the foreseeable future.
Investing in property in London should be a cornerstone of your property investment portfolio. London has seen house prices staidly increasing over the past six year and now the rest of the UK is climbing again. Property is a positive and valuable commodity this is made even more so by the shortage of property being built instigating lack of available quality new homes in years to come. London property is a brilliant way of investing into mid to long term material assets that are sure to bring back great return.
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Investment in the London Property Market
Here at New Build Sales we have been generating wealth for property investors for many years. Rising number of households, continued economic expansion, population growth, increasing inward migration and demand from international investors has been driving rapidly growing demand which significantly exceeds supply of property in the UK.
The UK property market fell by 20-25% when the major global financial crisis and economic downturn happened this provided outstanding opportunities for investors.
The credit crunch and meltdown of the property market, caused most of the developments across the UK and London to be put on hold this severely disrupt the supply for many years and managed considerably broaden the huge imbalance between supply and demand on the already under supplied UK, and especially London, property markets.
London remains the best city in Europe for investment. In recent years it has been clear to see that the London property investment has been more profitable compared to the average in the rest of the UK as London prices have been rising faster than those throughout the UK. As expected London property prices have risen faster than the UK as the markets have started to recover.
New Build Sales sources deals in strategic London areas, where a property price growth is expected to exceed an average London property price growth. Also, financial leverage from off plan property investment or a mortgage increases the investment return.
Investment in to London off plan property is a convenient and hassle free way to get an introduction to the London property market. An off plan property is a property before completion and sometimes before the beginning of construction.
Financial leverage gives local and international buyers benefits from London property investment as they are able to either invest in to off plan property with a low deposit of about 10-20% of the property price until construction is completed, this is unlike 20-100% deposit in other countries around the world, or if they choose they can get a mortgage up to 75% of a property value.
It is usual when buying an off plan property in the UK to pay 10-20% of the property price before completion of construction, this allows the investor to benefit from any price growth during the construction period this means that if it was reserved for 10% and its price went up by 10%, then investment would have already given a 100% return on invested capital.
When using a mortgage, a buyer can take an interest only mortgage. This type of a mortgage requires the repayment of the principal only when a property is sold. With this kind of a financing structure, rental income from a property normally covers interest and property management costs. Therefore, if you paid for 20% of a property value yourself and used a mortgage to pay the remaining 80%, and if property values went up by 10%, the gross return on your property investment is 10/20=50%.
Property investment in the UK is very tax efficient for non-residents as they pay 0% capital gains tax on their property investment.
Property transaction costs in the UK (stamp duty, legal fees, etc) are lowest in Europe they average about 5% in total.
It is very safe in the UK to invest in property as documents and transfer of funds are handled by regulated independent law firms, and the UK’s Land Registry registers all property title ownerships.
Also to preserve confidentiality, save on tax and simplify transfer of the property to heirs non-resident investors can purchase UK property on an offshore company name.
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- Exclusive access to the latest off plan properties
- Below market value (BMV) investment opportunities
- Reports and updates on the London property market
- Professional advice from our dedicated Buying Consultants
- And much more