London

Has anyone got interests in London? Was curious where London is going from here and if there is any CG left in there.

 

I check it semi regularly- my partner is from there and we have money still tied up in the UK. We often talk about buying there but feel there are more benefits to investing in Australia (mainly concerning taxation), considering we have settled here.

The market has definitely moved in the past 12-18 months, there was some good value purchasing in the middle ring before that. From talking to friends on the ground over there they say that times are better than they were post-GFC (I lived there 2008-2012), so there may be some growth to come in the short term.

Surely a global city like London would be a good option in the long-term? People are constantly arriving there both domestically and from overseas, and land within the M25 ring is pretty scarce.

 

"London calling to the faraway towns
Now war is declared, and battle come down
London calling to the underworld
Come out of the cupboard, you boys and girls
London calling, now don't look to us
Phoney Beatlemania has bitten the dust
London calling, see we ain't got no swing
'Cept for the ring of that truncheon thing"

Had to throw this in. Hope it doesn't "clash" lol.

 

Would've been great buying during gfc but feel I've missed the boat. Maybe in the next life?

 

I've got a place 30 miles from London and still watching that area rise. I think there's growth there yet but couldn't say what is driving it. I'm in Kent but living here in Oz. It's just my old house but it's lovely and cash flow positive so no need to sell.

Actually thinking about it now the area I'm in is having huge gentrification all over and universities have gone in. The train service has had a 10 minute time reduction to get into London so there are a good few drivers there.

My place is in Medway

 

I hate that song and could never stand the Clash. Like London though...

 

I'm not so sure. I know lots of Asian money buying in London but will the trend continue?

 

Asians buying everywhere

 

I would agree. Like most truly global cities worldwide, London has done really well in ythe last few years. so much so that its damn expensive (as if it wasnt before) .. Going in now will attract premium prices. Long term though cant go wrong.

 

Not in Asia, I guess

 

Since the last post, we've seen Brexit and a diving pound. Is anyone considering London at the moment?

Could these events be a buying opportunity? When one thinks about blue chip cities in the world, it's hard to imagine London ever ceasing to be one.

 

Premium £1m+ market is getting whacked, in part due to extortionate stamp duties. Lots of opportunities at the lower end of the market (especially with the pound now only buying A$1.60).

 

I think London has lots going for it however would be wary about it in the short term for a few reasons including

Brexit - who knows how this will play out, with potential impacts multi-national EU HQs relocating to within Europe.

Recent Tax changes - a few changes handed down in the past budget aimed at curbing property growth including
a. non PPOR incurs extra stamp duty of 3%,
b. mortgage interest can only be claimed to a tax rate of 20% (not taxpayers marginal rate),
c. Captial Gains tax has been reduced on other investments (eg shares) but remains unchanged on property (making other investments potentially more attractive)

Huge Recent Growth - these things come in cycles as we know, after the past few years growth I believe this cannot be sustained and there would be a slow down.

Overall I think London will always be attractive due to the inherent demand that is there with its position as one of the global cities, I just think the next 5 years of so it has quite a bit of uncertainty.

 

Not that I'm excited about OTP in inner Sydney, but if one looks at OTP in a good location, there are some new OTP in Zone 1 of London for around Sydney (or even less!) that seem attractive - with the added benefit of media not shouting oversupply on a daily basis!

It seems to me however that this becomes a significant FX play so acknowledging that this is the case, the additional stamp duty is looking 'absorbable' given the potential upside. The mortgage interest deductibility law change doesn't really affect Aussies since our wonderful country is first class at capturing foreign income anyway so Australian tax laws will apply. Yield is slightly higher than Australia (not by much).

So not sure about house and land comparison but if someone is looking at OTP apartments in Sydney, London looks attractive in comparison.

 

How much are they going for?

 

looks like one bed around GBP 560K onwards. 1 Bedroom Flats for Sale in SE1 - Zoopla

 

Was there recently in Europe and was checking London and Berline real estate markets.

I like London as due the currency and pricing.......could be a very good earner if you have a 5-6 year view. There are parts of outer London where you can buy a terrace house for 180-200k pounds and rent for 850-900 pm. Currency play is the biggest advantage.

 

Anybody else got anything to comment?

 

Nothing other than today's FT article https://www.ft.com/content/dae9099e-96bf-11e6-a1dc-bdf38d484582

"Foreign property investors
Since the vote, London’s property market has faltered, but not collapsed. Its resilience is largely thanks to overseas investors who have taken advantage of falls in the value of the pound.

“Real estate has become a currency play. Many are taking the view that sterling has fallen significantly and they’re happy to come in and get an income-producing asset,” said James Beckham from Cushman & Wakefield, the property advisers.

While investment in central London offices dropped 64 per cent in the third quarter from a year ago, overseas buyers made up a record proportion of that investment, accounting for more than four-fifths of the cash invested.

The story is similar for London’s housing market.

Overseas buyers made up 29 per cent of those purchasing homes in the capital’s upmarket areas in the third quarter, from 23 per cent the previous quarter. Their numbers also increased in absolute terms, according to Hamptons International, an estate agency.

The increase was especially marked in “super suburbs” such as Hampstead and Richmond. As with commercial property, UK buyers decreased."

 

another reason why there's that voice inside that hopes despite Brexit, London will still be an in-demand city. Sydney's not as good as the world thinks it is, study finds