Homes in London are collectively worth approximately £1.5 trillion, an astronomical figure that is very difficult to picture. In the larger context, this is 35% of the value of houses in the whole of the UK. The city commands so much value that even tiny ex-council flats can enter the market with huge price tags. One property in South Kensington made the headlines recently because the two bedroom flat was put on the market for a whopping £1.15 million. This set a new record asking price for a property on King’s Road.
It is demand for properties in London coupled with a very tight supply that has driven the prices up so much. Homes are in such huge demand that prices can rise hugely within a very short space of time. A case in point is an 8 bedroom terraced house in Ilchester Place, currently owned by the Canadian Government to house visiting diplomats. The property is unique because its value has increased an estimated £10 million in just 8 years, or approximately £120 per hour.
Houses may be in demand but it is not just the residential sector that is booming. Demand for office space is also very high. In the last six months construction of new offices has grown by some 24%. 17 square metres of office space in the city’s West End is worth the same amount as the average person would earn working in a thriving industry, i.e. £35,000 per annum.
With residential and office space in demand there is more pressure than ever to free up land to build on. One of the reasons people invest so much money in London is because of the rewards. With a bigger supply comes smaller rises in prices. Alongside this residents also want to avoid the city becoming sprawling and crowded like other large cities around the world.
One thing remains true; investing in properties in London can offer huge rewards. In fact the returns you can expect could earn you more than any other type of investment, including rare art and gold. If you would like any advice or guidance on investment properties in Hounslow, Kensington and Chelsea, Westminster or any other sought after areas of the capital, we can support you through it.
