The demand for luxury property in London is not falling

The demand from investors for the rental of residential property in the luxury sector in London is increasing. Every eighth buyer in the sector of real estate makes renting your property.

According to a new report the real estate company Savills, the effectiveness of Prime residential property London is in a strong Parallels with commercial property in the Western part of the island, although the characteristics of residential real estate in London show better capital growth than rental income.

As a consequence, the level of profitability is about the same, but investors flocked to lower rental income, considering the investment in prestigious areas of London a safe haven, and believing that the prospects of such investments stronger.

In the elite areas of Central London’s average gross annual income has declined from 6.3% in 2005 to 3.1% in 2013.

Although demand from investors is a small proportion of the total demand for housing in luxury areas of London compared to the demand for commercial property, however, it is quite high. More than 20% of buyers of luxury residential property in Central London bought for rental, and on the East this rises to 25%.

The analysis shows that Central London in particular, investment in residential luxury properties in London, more interesting in terms of the increase in the value of the asset. The growth potential and security that is offered to preserve wealth, is of crucial importance in deciding foreign investors from Europe and the middle East.

In the report, Savills also noted that in the elite sector of the rental accommodation family with lower corporate budget moved to a less expensive part of the elite areas of London and in new buildings in new areas, which, respectively, inhibits the growth of rents in the sector.

As expected, the demand for luxury housing is to be expected on the part of people employed in financial and insurance services sector. It is also projected that the increased demand from employees of the technology sector, media and communications.

® Maxim Savitsky 12.09.2013