A third of my clients in recent years have been looking to acquire property in London for investment purposes, and as such, knowledge of the intricacies involved in finding the right property, in the right location, at the right price, has never been more important.
Traditionally in a buoyant market, investors have taken all kinds of risks, buying unseen property in secondary locations and previously untested markets. Since the beginning of the recession, the London market has become incredibly challenging, and it is now crucial that investors ‘buy right’ and resist the temptation to take risks.
Central London postcode areas
The choice of the London postcode is arguably the single most important consideration in the buying process. If budget allows, the appeal of fringe areas pegged as ‘up and coming’ should be resisted in favour of the more established addresses such as Mayfair, Belgravia, Knightsbridge, Notting Hill and Kensington. Although it is true that these prime locations come with a higher price tag than their lesser-known neighbours, it will always be money well spent.
In a strong market, properties in fringe locations will sell, but may take longer to do so than their counterparts in established addresses. However, in a weaker market these kinds of property will quickly become less appealing as serious buyers are inclined to wait for something with a stronger investment guarantee.
The selection process doesn’t stop at the London postcode because there are very real sensitivities associated with the exact street, and even the right position on that street, that can make a significant difference to the value of a property. Then there are questions such as, does the house face in the right direction? Is the apartment on the right level? Is the layout appealing? All these questions, and more, need to be carefully addressed and likewise it is important not to be seduced by a house just because of the square footage.
The buying agent
As a buying agent, my business is to know these areas inside out, and to understand all the factors that contribute to the value and potential capital growth of any one property. Securing access to this ‘insiders’ pool of knowledge may just mean the difference between making a risky or a wise investment.
The recommended prime postcodes of Mayfair, Knightsbridge, Belgravia, Notting Hill, St John’s Wood, Chelsea & Kensington in particular, continue to attract the world’s wealthiest. Most recently we’ve seen interest coming from countries that are experiencing either political, economical or social turmoil within their own borders – the Middle East, Russia, Asia and, closer to home, Greece, Italy and now France.
For many international investors London remains top of the list and compares favourably to other world cities including New York, Singapore and Paris, in terms of the costs involved with buying and selling property.