The prospects for the London real estate market positive, despite geopolitical risks

The demand for rental residential properties in Central London have fallen in recent months. In October 2015, the decline was 0.5% , which indicates a slowing of the rental market. After peaking in may 2015 is 4.2%, the policeman, the growth of prices for luxury housing rose 1.5 percent. Data provided by real estate company Knight Frank, indicate that in September the amount of tenants that have concluded lease agreements, there were 12% less than in September 2014 and the average rental yield amounted to 2,95%. 2015 in order to analyze the rental market in Central London it makes sense to split into two halves. The first half – until may , when the demand for rental grew due to the stagnation in the market of sale pending the outcome of the parliamentary elections . The uncertainty of tax prospects and high stamp duty has provoked the demand for rental, especially in the sector of super-expensive housing – from 5,000 per week. But, after the successful market outcome of the election , in the summer the market started to exert a strong influence the uncertainty in the global economy. Problems in the Chinese financial market contributed to the shrinking budgets and job cuts in the financial sector, which immediately affected the demand .

The fall in oil prices affected the sentiments of the global energy companies, many of which also have their offices in London.

A Prime example of companies cutting their costs is the reduction of budgets for advertising. Since the summer an unusually large number of companies have postponed or canceled their advertising campaign. In addition, growing speculative sentiment on expectations that the European Central Bank will expand their quantitative easing program in December 2015, hoping to stimulate inflation. The strong decrease of demand has been noted in Kensington and Chelsea, where traditionally there has been a strong demand from the financial sector.

Despite all the geopolitical risks, the UK economy is on the rise and demonstrates strength and confidence. In the long-term forecast for the demand in the rental sector of real estate of London a positive, London remains one of the most attractive cities in the world to invest, do business and work.

® Maxim Savitsky. G. 02.11.2015

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