Friday, March 7, 2014

The only way is up, baby for you and me now…Buy, Buy Buy!

Forget Russians! A Small London Flat Will Cost $50 Million By 2050

While Canada may have bitten the hand that feeds it real-estate bubble, one of London's biggest real-estate investors says that even if sanctions were imposed against the Russian oligarchs, London property prices will continue to soar. The average London "flat" could fetch GBP36 million by the middle of the century, and is therefore a bargain now, Hugh Best advises clients. His reasoning is impecable, "the average price in prime central London is now £1.5m, and has been growing at 9% a year, which we think is firmly sustainable. They have been growing at that level for 40 years and we see no reason for that to change." With two-thirds of new homes in London sold to investors, they are all driving up prices and "the Russians are only a part of it... and the Ukrainians might come...

Posted by khards @ 09:49 AM (2668 views)
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6 thoughts on “The only way is up, baby for you and me now…Buy, Buy Buy!

  • “Youu may think a shoebox-sized flat in central London costing more than £1m is an insane illustration of a property price bubble, but it could be the bargain of the century.
    According to projections by one of the biggest investors in “prime” property in the capital, that average flat could fetch £36m by the middle of the century – if its predictions of 9%-a-year growth in prices become reality.
    Casting aside concerns that Russian oligarchs will no longer be sheltering their billions in luxury mansions, London Central Portfolio has launched a £100m fund to buy one- and two-bed apartments in the capital’s most exclusive districts.
    Hugh Best, LCP’s investment director, said: “The average price in prime central London is now £1.5m, and has been growing at 9% a year, which we think is firmly sustainable. They have been growing at that level for 40 years and we see no reason for that to change.”
    The Crimea crisis would not halt London property’s inexorable rise, said Naomi Heaton, LCP’s chief executive. “The Russians are only a part of the market and have been dwindling in number over the past few years … we could instead have the Ukrainians coming in with their money. London is the destination for the high net worth community of the world, and we are only just beginning to see the mainland Chinese. The loss of some Russian oligarchs is not a fundamental loss for the market.”

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  • [email protected] 1. The Chinese are already here in full force, but they are now buying new builds outside central london as far as the M25.. The only real solution to stop this vaste swathes of investor money is through the tax system. Introducing taxes:

    a. For non residents buying and selling properties in certain areas of the country like london where there is a shortage of housing available.
    b. Unoccupied properties. with an increasing tax, if they are left unoccupied for more than a year.
    c. Extorniate taxes for new builds that are left empty.

    I cant see how this would be a vote loser, because it would increase the coffers of the treasury and if you are a resident of the UK and let out a BTL you wouldnt be effected. Plus although most home owners don’t like to see their property drop in value, most would admit that property prices are effecting the next generation and swinging increases arn’t good. I would really like to see one of the four main parties articulating this for the next general election.

    If you are a foreigner, with no interest in the UK and a london property is a mere commodity, like gold or oil, then you pay theprice. London would still be a premium place as it is a safe haven and if you are a rich chinese worried that money left in China could be eventually confiscated you are just happy to guarantee 50p in the pound for your investment.

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  • I seem to remember many similar articles around 2007, before the Northern Rock shit hit the fan (when interest rates were normal).

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  • Yes Khards. London seems to be attracting the dirtiest money globally and at the expense of the Londoner who is just trying to buy a place to live in so he or she can go to work and pay their taxes to this government – something that seems to be lost on George Osborne who continues to betray the British worker to pander to these crooks. Tax these house blockers to the hilt and a lot of our housing crisis would be over

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  • I am not convinced hat stopping the current housing market ‘investment bubble’ from outsiders and boomer BTL is such a great idea. Why? Well it’s getting new homes built that people could not otherwise afford.
    A building boom is baked into the pie and is as sure as boom and bust and house price bubble. We are now getting to the interesting part – I would not be surprised if building reached 200k units per year within 3 years and then who’s going to want to stop the party? Prices will keep rising as investors snap up the properties (see Ireland, Spain, et al for reference).

    It’s just part of the cycle!

    We need to suppress information like rental reports (noticed any lately?) and keep BTL interest rates low in order to get more built.

    I personally think “Help 2 Let” would be a great idea with millions of vacant units being built in a relatively short time frame.

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  • Central London is the go-to place for hot money.

    If you are one of the top politicians in China, Ukraine or the USA then a few hundred million parked in Central London (with very low rates) is just the job (= 3 big houses). If you buy bullion you have the problem of where to stash it and the costs of keeping thieving hands off it .

    In London you only have to watch out for squatters breaking into your empty house. BUT, fear not, Osborne is tightening up eviction rules (he knows where his friends are).

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