09 Aug 2018
UK withdrawal from the EU and the risk of no-deal may complicate the situation, even though, the negotiators are still trying to get a deal in the coming three months and a lot is still unclear. The transition has resulted in volatility in economic situations. London is expected to behave in a way to comprehend the mutual benefit framework and promote the interest of both the parties involved. London is the financial capital of Europe but now many Britain based banks and financial institutions are shifting to Frankfurt, Luxembourg, and Dublin, and many new jobs have been created in Paris, Milan, and Madrid.
Frankfurt may become the new business hub, whereas, in Germany, at least 20 new banks are opening up their offices. This has made real estate outside Britain more attractive, especially, there are investors seeking office spaces in secondary markets in some of the top cities. In London, some investors from Asia are grabbing opportunities, which are undervalued during this time and have prospects to give attractive yields. The luxury segment in real estate is still booming in London where new discounts are offered to attract buyers.
The study by LonRes suggests the leading markets in London are - Chelsea, Notting Hill, and Kensington. Many Middle East investors were interested in buying properties in the platinum triangle, and many new wealthy Gulf investors from Qatar, Bahrain, and Yemen are enquiring about the luxury properties. These are some regions where the property value is above £10 million. Some of the highest discounts on properties are offered in Victoria. Westminster and Mayfair showed positive growth in property with 14 percent rate- where the sales grew 21 percent.
Non-luxury millennial buyers
The July-Rightmove index suggests sellers are reducing asking price to attract buyers due to greater competition in the property market in the UK. The number of property on sale increased in July but the buyers’ number remains static. In the non-luxury section, the house asking price was reduced by the sellers to promote the sale. The index statistics suggests London properties take about 70 days to sell and Scotland 39 days. The sale number has not much changed – as per y-o-y comparison but the uncertainty during Brexit has led to a reduction in the number of buyers – who want to avoid risks in investment during the transition phase. Some of the worst performing housing markets is Hackney, while, the price of one to two bedroom house witnessed the highest drop during this phase.
In the non-luxury section, professionally well-settled millennials, who are earning well - above average, do not consider buying home a priority in the current market conditions. The job number increased in London in June 2018, job growth was positive, unemployment was down and business confidence increased. Overall London shows positive trends but the experts want to wait and see the impact till October. Some millennials find the houses are unaffordable and even though, a major share of their income goes into rents, still they are not motivated to buy houses. The reasons are - many millennials live with their parents, some suspect financial crisis and some find inflation led to rising in the cost of living, while, increasing interest rates made properties exorbitant.
To know more about property rates and buying options in London, click Hamilton International Estates (www.hamiltoninternationalestates.com).
Categorised in: All News