For those who earn in dollars, property in London is even cheaper

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The weak pound has done its job – luxury property in Central London has become even more attractive to foreign investors seeking a safe investment for their funds, and, as analysts predicted that foreign investors will continue to invest in luxury properties in London until at least 2018, these are the latest research review the largest English Agency Knight Frank.

The cost of real estate (apartments and flats in London. Westminster) in Central London rose to 0.7% in April and November 2010 we can see its steady growth. A large portion of this growth depends on demand from foreign buyers.

Since the pound’s weakness we need to do even more research to make conclusions of how this fact affected the luxury market of residential property in London.

In GBP the price of property in Prime Central London now is 17% more expensive than their peaks in March 2008. However, it is necessary to take into account currency fluctuations, for example, if you calculate the price in dollars – the price of real estate in London is 11% below its March levels, when the price was highest. Real estate investment in London. Tower Canary Wharf

If you calculate the price in Euros, the cost of luxury homes in Central London have also increased compared to March 2008 – by 9 %. USA currently is already out of recession, and the dollar is in the best position, the ongoing quantitative easing measures will contribute to the continued strengthening of the dollar against the pound and the Euro over the next five years.

Indeed, market research of the London property, which was based on the forecasts of currency exchange rates and projections of changes in prices for luxury housing in London shows that by 2018 luxury properties in Central London will grow by 20% in dollar terms and in terms of GDP will rise by 26 % . Our advice to investors. New building in Fulham.

As a result, the entrance to the London real estate market will become more accessible for those who receive their income in dollars, or has savings in dollars.

The report also considered the impact of the new tax regime for transactions more expensive than £ 2 million, including the introduction of a 7% rate of tax collection, (What “Stamp duty” ), which was submitted in March 2012 for real estate market in the UK.

The volume of transactions for amounts above £ 2 million, for the 12 months from March 2012 to end of March 2013, suffered in connection with the uncertainty associated with expectations of increasing the tax on capital gains.

But the explanation of the government that have been provided in detail in December 2012, led to a clear situation on the market of real estate in the UK and in the 1st quarter of 2013 has been a breakthrough in the number of transactions in the market of elite housing in London.

Analysts believe that in the long term as a result of a 7% rate of the state fee, the number of transactions in the market of elite real estate of London cost from £ 2 million to £ 3 million will be reduced by approximately 5 % in comparison with the amount that was previously.

Interesting is the fact that ceteris paribus the effect of increasing the state fee of 7% may lead to the fact that transactions of more than £ 3 million will fall to almost zero.

As for foreign buyers appetite for good investment income, ultra-low refinancing rates and the weak pound – the perfect components for that heady cocktail that will be a safe haven for investment and foreign buyers still continue to buy.

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® Helen Entree. 09.05.2013