The growth of real estate prices in London is not surprising, according to many independent analysts: after all, in the world for several years ‘quantitative easing’ is raging, and printed money, one way or another, leak in the real estate market. The capital of the UK is the habitat of almost all the millionaires from around the world. So expecting the scenario with a certain fall in prices is probably not worthy to consider; moreover, the long-term forecasts include the scenarios with 35% growth of real estate price in the next decade. The printing money press keeps on running. Therefore, even if the deterioration of the economic situation becomes evident, the prices will come down but not for long in nominal terms. And then they will not only return to the previous level, but also rise up substantially.
The limited supply of housing and the uniqueness of the English market attracts buyers, despite the continuous rise in prices and inflating bubble in the real estate segment, according to senior analysts at Alpari. If previously real estate in London was acquired by both locals and foreigners, in the last year the share of buyers from abroad has substantially increased and went far beyond 50% mark. Millionaires from various countries consider it to be a good taste to have a house in London, though, objectively speaking, the price tags are too high. The proposal also narrows quite significantly, and it only adjusts the price, so it is growing at a 15-25% annual rate; plus the increase in the end values is also observed with an increase in conveyance solicitors services and other auxiliary, yet essential services.
But in general, against the background of instability in the stock market, real estate market as a conservative tool is becoming more in demand by investors, a member of the board of directors Topaz Invest, Max Rajewski says. And first of all their interest accounts for ready-made objects. And it’s not just London. A similar trend is observed in UAE and several EU cities. The demand as for residential complexes and cottage villages on the maximum availability and minimum risk is an increasingly popular investment. ‘I believe that in times of financial instability, the next few months in house prices in London will continue to grow, because the development and construction projects are not that many, and the demand is growing. The excess demand and limited supply will continue to push prices up’, the expert concludes.
However, certain niches have changed slightly. In the most prestigious areas of London the construction of 50,000 luxury real estate objects is scheduled or has recently started according to Financial Times. This construction activity is quite justified, because after the crisis of 2008, the local real estate market began to actively recover. Demand from investors off scale. Although in recent years the interest towards elite options has decreased. In 2014, which showed the highest total sales of luxury class of objects worth more than £1. The new owners have found only 3900 houses located in central London. Against the background of the implementation of new exclusive residential complex on the bank of the Thames, the situation is not going to cause concerns though, as the temporary reduction is caused by the downfalls in the economies of China and Russia, and experts believe that the situation will get back to normality with an inevitable export of capital and normalisation in the local economies.