These are the five top reasons to buy London residential property right now
1. Supply
London is a restricted market. Old buildings are protected and the maximum planning options, if available, are usually one more floor in height. Sites where planning allows for skyscrapers are few and far between. Issues with “right of light” stopping new buildings overlooking older buildings and a Government planning bureaucracy that is slow moving have meant that London has fallen behind the optimistic new build targets set out in the “London plan” years ago, when Boris Johnston was Mayor of London.
The shortage of stock has been well documented and is now acute. This is being compounded now by virus associated issues closing building sites across London. Nothing is likely to be progressed this year on the New Build front.
2. Price
Prices either stood still or slumped over the five-year Brexit saga. This stagnation was set to change at the beginning of this year. A fresh new Government and solutions to Brexit made the market move sharply upwards in the first quarter.
Virus issues then took over and we have an immediate slump in the market. This slump is driven more by fear than property economics and as soon as “lock-downs” discontinue and the market starts to come back, perhaps by this coming Autumn, the sharp rise we saw in the Spring is likely to continue.
3. Tax
New UK Chancellor, Rishi Sunak created a window of 12 months before a new 2% tax to overseas buyers kicks in.
4. Mortgages
Mortgage rates are at an all time low. Buyers can access rates as low as 3.1%, while standard rates average 3.35%. These rates are set to stay for the foreseeable future, as the Government will want to add stimulus to both the economy and the property market in UK.
5. Currency
This chart shows year end exchange rates between US dollar and pound Sterling. The 2020 rate is the current rate of 1.26 US dollars to the pound.
We are now seeing the lowest USD/GBP exchange rate for the past 4 years. As economies revive after the crisis, the UK is set to move forward a lot faster than the US and by the end of this year we are likely to see a stronger pound.
Right now presents an excellent window of opportunity now for overseas buyers. Most developers have closed their London sites and property transactions have ground to a halt as the British government advises people not to move house at this time.
Developers will be offering fast discounts for buyers who are ready to commit with immediate deposits.
Projects will quickly restart once lockdown ends and prices are set to rise rapidly as Londoners get back into gear – making now an ideal opportunity to hunt for good deals on new build projects.
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