Tag Archive for 'london property prices'

The Financial Hub And Property Prices

Published
by
Property Know Team
on June 2, 2008
in Property Know
. 0 Comments

A visitor site posted a comment on the article (London Property Prices: Are they dropping?), about our views of why the London Property Market is still strong and why it will always be.

“London is the financial heart of the European Union (EU) and capital of one of only four trillion dollar economies in the EU with an infrastructure to match. The business infrastructure is being improved even further, because of London being selected as the venue for the ultimate global sporting occasion.”

So we are going to expand on the comment raised, and look at several points on why London is a financial hub. We will cover the “ultimate global sporting occasion” i.e. the Olympics 2012 later. London is one of the worlds Financial Hubs, even though there is a big uproar about the credit crunch and fears of a looming recession. Estate Agent Savills, estimates that £2 Billion will be spent from the “City Crowd” for 2008. This means that desirable areas in London such as South Kensington, Kensington High Street, May Fair etc will still be in high demand, even though there is a great deal of speculation and dropping property prices with the overall UK Property Market.

London has become a strong financial hub in the EU, due to its strength in Banking and Finance. Areas such as Canary Wharf, and more traditionally “The City” (Bank, Liverpool Street etc) have been centres of Banking and Finance for decades. And with the strength and stability of the UK Sterling (£) it has many advantages over other countries when it comes to the Exchange Rate and Forecasting.

Looking at London, and why companies like to conduct most business in London. We are going to take a simple look at Time Zones. The world has now become so small and to do business internationally is becoming increasingly easier. London is GMT (Greenwich Mean Time), and if a business has to call Asia it is only 6-8 hours ahead and if the company has to call North America it is only 5-8 hours behind. However if you are in Asia and want to do business with North America, it is roughly 12 hours ahead/behind - and vica versa. So if you wanted to contact your business associate in Asia and you were in America at 9am, that would mean that you would have to be in the office at 9pm however if you were in London/UK you would have to be in the office at 2pm-4pm, which is within normal working hours. Something as simple as that has a big impact on why many companies want to base their Head Quarters in London.

London Property Prices: Are they dropping?

Published
by
Property Know Team
on May 25, 2008
in London Property Market
. 2 Comments

There is currently a great amount of speculation in the London Property Market. Will it drop? Has it dropped? Is it dropping? In short the answer, is yes - certain parts of London have dropped in price, however Central London prices will hold strong.

Following up from a previous post “30 Year Low for Property Sales” talks about property sales in the UK dropping and that asking prices have had to been dropped. And we at the London Property Market side, completely agree.

We have always held to the opinion that the best place to invest is in Central London (places such as South Kensington, Queensway, Notting Hill Gate, Knights Bridge, Regents Park, St Johns Wood etc). If you look at that specific part of Central London, the prices have not changed much compared to the rest of the UK and Greater parts of London.

Why is that?

Lets look at the Supply and Demand, in Central London it is a known fact there is NO MORE LAND to build property on. So supply will pretty much or less stay the same, however demand will always increase (due to population growth, it is Central London where people want to live, Foreign Investment etc). So even if there is a dip in the local economy, there will be foreign investment to pump into the London Property Market. Demand will be increasing, and supply will stay the same - hence prices will increase! The hardest thing in buying in Central London is that the “barriers of entry” are extremely high. To get a decent 400-500 sq/ft 1 bedroom apartment, you will most likely be looking for a minimum of £375, 000 and go up to well the millions!

How about outside Central London?

The problem about outside Central London (mainly Zone 2 onwards) is that there is still Land to develop properties. Lets take Canary Wharf for example, which was a “boom” zone for buyers and investors. But if you look at the Canary Wharfs Property Market, owners are having problems to cover their mortgage payments and value of their properties are depreciating! And why is that? There is so much development that supply in Canary Wharf keeps on increasing - so it can meet demand. So prices are either stable or going to decrease due to Supply over lapping Demand. This is the current situation.

So just be very careful when you invest in property at the moment. The markets are soft in many areas in the UK, so you will have more chance of getting a good deal. In Central London, throw a bit more caution.

All the best!