The average property price in London goes up by nearly 30,000 pounds with every passing year. London has been able to successfully attract almost 21% of all investments that are carried out in Europe each year. Some development and investment firms opined that the West End section of London is an awesome hotspot. Due to this, property prices in this region have soared through the roof.
It is a fact that London still attracts immense interest from individuals residing all across the globe. Those individuals who are seeking to commence businesses, relocate permanently, or invest in the city have found London to be extremely promising, thus causing property prices to steadily increase. There are thousands and thousands of individuals who are seeking to work as well as simultaneously reside in the city of London. However, due to the unprecedented amount of interest that the city of London is generating, there are a few concerns arising.
The concerns are arising because the property bubble within the region is getting steadily closer to bursting. Consider the fact that the average cost for a West End property in the city of London is close to 1.5 million pounds. This is nearly six times the average cost of properties in the rest of the UK. Hence, many London property owners are presently unwilling to sell their properties. The primary reason behind this is the belief that London property investments are yet to reach their peak. With the dwindling supply of prime properties, prices are eventually soaring. This has made prospective investors to seek secondary markets in order to avail affordable properties.
The surging number of foreign investors who are searching to buy London properties for both commercial and residential use is having a profound effect on the local economy. There are scores of investors that are opting to buy properties for the sole purpose of investment. Some property agencies have revealed that less than half of the total number of homes that are bought by foreign investors in London are eventually utilised as the central home for individuals buying them.
Hence, prime properties in Central London are left unoccupied. With London property investments soaring through the roof, it makes no sense for property owners to let them. That being said, many properties are being bought as a trophy-style investment. In recent years, among the thousands of newly built properties that were successfully sold in the prime region of Central London, a majority of them were eventually sold to overseas individuals.
With the occurrence of these types of buying patterns, prime Central London is potentially becoming a ghost town. Local businesses are reporting losses, which will ultimately lead to a decrease in property values of business establishments in the region.
Property advisors have predicted that office space in London will begin to increase in value in the forthcoming years. Thus, landlords will have the ability to increase the overall rent that they charge, and everyone should witness a kick-start to the economy of London, ultimately.
When it comes to London property investments, there seems to be no decline in the surging popularity of commercial and residential properties or the prices associated with them.