There was an article in the Financial Times recently called The Problem With Flats. They rightly pointed out that they had underperformed houses over the last 5 years. Which has been against the trend because apartments in London have outperformed houses (on the whole) for the last two decades.
The FT cited a couple of reasons for this:
- The pandemic
- The Grenfell Tower fire and subsequent issues with cladding in several buildings
Consequently, the article suggested that searching for flats to buy in London is not a good idea.
Is Searching for Flats in London a Good Idea?
In London, the reduction in the popularity of Flats in central London was also due to the joys of Brexit and Corbyn. Most international buyers and the wealthy in general delayed discretionary purchases during this period of huge uncertainty.
And while lockdown is over and some international buyers are in London again, we are still well below normal levels. But this seems to be temporary as London has recently been voted as the number one city for the wealthy.
The rental market also shows what is really happening. Yes, houses are trading for a premium in both the sales and rental market, but there is also a shortage of flats in London for rent. And when international buyers return to London, they will mainly be focussed on flats to buy in London rather than houses because outside space is less important to them – people do not come to London for the weather!
Likewise, millions of people have lived in luxury flats in central London for decades and been perfectly happy. The lockdown was an anomaly rather than the start of a – and please excuse the use of this dreadful term – “new norm”. The stunning weather we had was also an anomaly as the rain has proven! So, I expect the premium for outside space to reduce in the next couple of years.
As usual, it will pay to ignore the talking heads in the press and conventional wisdom.
Indeed, looking for flats for sale in London is a good idea as central London flats are looking very good value at the moment and will prove to be good investments. But whether you wish to acquire a house or an apartment in London, please follow our “Best in Breed” strategy to ensure you find the best property your money can buy and negotiate the lowest price possible.