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October 31, 2022
Jeremy McGivern
Posted in: London Property

Do you know why London property is safer than the rest of the country?

London Property |

One of the questions I am most often asked is a version of this:

“Is it better to buy in London or elsewhere?”

From an investment perspective, this does depend on timeframes. There will be times when areas outside of London (and the southeast) will outperform just as we have seen in recent years. However, over the medium to long term, London has always increased in value more.

There are various reasons for this including:

  1. Most UK infrastructure projects benefit London more than any other city
  2. It is one of the world’s major financial centres
  3. Heathrow and Gatwick are key travel hubs
  4. London attracts international wealth
  5. London dwarfs every other city in the UK

And there are many other reasons which I am sure you can add.

London property

However, do you know why London and the southeast are less volatile?

That is to say that while there will be times when prices fall as well as boom, the price falls are less severe and tend to last for much shorter periods of time.

Well, as ever it is to do with firm foundations as was pointed out in this weekend’s FT:

Equity stakes are strongest in London and the southern regions, where up to 60 per cent of borrowers own at least half of their home’s equity outright

And for many people in prime central London, the value of their home is not as essential to their net wealth as the rest of the country.

As I say, this does not mean that prices are bullet-proof. The UK property market has a very clear cycle of boom and bust; London is no different. But, the ability of owners in prime central London to ride out any storm is much greater than anywhere else.

Prices can also go much higher than most economists and pundits think possible because there is considerably more price elasticity at the top of the market. This has always been the case which is why the probability of huge price increases in the coming years is much higher than the mainstream realise and some properties will massively outperform others.

Of course you may disagree with this completely, but would it be a bad idea to consider what history has shown us and at least question knee-jerk articles in the press?

Warren Buffett said the following about investing but it is also true about property, irrespective of whether you are planning to acquire a home or investment:

“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

London Property: Contact Mercury Homesearch

If you have any questions or observations, I would be very interested to hear them. Simply email dee@mercuryhomesearch.com or call 02034578855 (+442034578855 from outside the UK).

Topic: London Property

About the author, Jeremy McGivern

My name is Jeremy McGivern. I am the founder of Mercury Homesearch, the internationally renowned property search consultancy, and author of The Insider’s Guide To Acquiring Luxury Property in Prime Central London. I have been acquiring property in prime central London for clients for over 13 years.

Having physically viewed over 22,000 properties in prime central London, studied the details of over 153,400 apartments, houses and investment opportunities and spoken to 232+ estate agents every week for over a decade.

My advice is in high demand and has featured everywhere from Bloomberg Television, The Financial Times and The Daily Telegraph to Forbes India and Bahrain Confidential.

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