A guide to buying London property
London is one of the fastest growing property markets and the sixth richest city in the world. Find out why…
The State of Property in London Town
If you find yourself aspiring towards a pot of tea and an episode of Sherlock, then London probably beckons your inner Englishman (or woman). And quite rightly so, given what’s going on. It seems there’s a lot more to be grateful for besides Benedict Cumberbatch, the Thames and Earl Grey. A burgeoning central business point, London’s property market has recently been booming too. The Savills Research report on Prime London Residential Markets (April 2014) shows that the city saw strong price rises over the past year, not seen since mid-2010. Prices rose by 13,1%, with the highest growth seen in less central locations and domestic buyer sentiment setting the pace. Interestingly, the research showed that two thirds of the sales were to UK buyers. Prime South West London – running south from Battersea to Wandsworth and west to Wimbledon, Richmond and Chiswick – was up by 14,7% year on year.
‘Quarter one of 2014 saw huge levels of activity in the market, previously unseen since the highs of 2007,’ says Lisa Mackenzie, Regional Sales Director at Kinleigh Folkard & Hayward (KFH) estate agents. ‘The number of buyers in the market rose by almost 50% year on year across London and the levels of stock available just weren’t able to keep up. As a result, we saw rapid price increases on properties, with 20% rises in just a few months becoming the norm, even in areas previously regarded as less desirable as many buyers began to be priced out of their core search zones and bidding wars and competition heightened. Over the past few months, however, we have seen these heady highs begin to stabilise, with more normal market conditions being seen across the capital. The number of buyers is starting to level out while the number of homes coming onto the market is increasing, offering far more choice than before. Activity is therefore high with many buyers who have so far been unable to purchase coming back into the market as it corrects itself.’
London Property Market Case Study
Take the incredible story of a Southfields’ house, for instance, that gained £660 a day in value (£800 000 in three years). In 2011 it was a fairly rundown home worth £575 000. After a devoted revamp by owners Andrew and Laura Blake it’s become an ultra-lavish pad that’s on sale for a cool £1,4 million freehold through KFH. The four-bedroom house, which enjoys an enviable location near to Southfields and Wimbledon Park tube stations, has been intelligently remodelled and now blends traditional period features with slick, contemporary functionality. It boasts a Jacuzzi, laundry chute (leading from each room) and a double-sized rain shower. There’s also an impressive kitchen and diner extension with top-notch finishes – including a boiling water tap, so no more need for a kettle – as well as a landscaped garden. Apparently the couple now plan to move on to their next renovation project. With the Southfields’ house having more than doubled its value, it’s a prime example of what the property market has been like of late. However, Savills Research indicates that core, prime central London locations are now hitting a plateau and have become more price sensitive. With growth starting to slow, stock is becoming available again and the opportunity to buy as a foreigner is looking more promising.
Buying Property in London as a Foreigner
‘Subject to mortgage approval and as long as you have a substantial cash deposit, as a foreigner, purchasing a home here is relatively easy,’ says Mackenzie. ‘Many international investors regard “the capital” as one of the best locations for property investment because of the ease with which they are able to purchase, although it should be remembered that international property purchasers are now subject to the same Capital Gains Tax laws as local investors.’
She adds that some of the areas most coveted by the world’s wealthy are Mayfair, Chelsea, Holland Park, Notting Hill and Knightsbridge. These areas are not only centrally located, but also have prestigious homes available. There are also many locations along the Thames that are coveted for their river views. ‘The South West London market is also very popular among South Africans in particular, who appreciate its leafy, suburban outlook and close proximity to the river and local parks, such as Richmond Park and Wimbledon Common,’ says Mackenzie. The most important decision buyers need to make is about location, followed by what type of property they are looking for. Mackenzie advises that buyers research the area they’re looking at in depth and view as many homes there as possible.
London Property Fast Facts
In the UK, most homes are sold as either freehold or leasehold. This refers to whether or not your property comes with ownership of the actual building and the land on which it sits.
Leasehold effectively means you own the right to occupy a home for a set period of time, which is determined by the length of its lease. You do not own the structure of the building or the land on which it sits. Flats are typically sold on leasehold, but so are many terraced homes. Leaseholders usually pay rent to the freeholder for the upkeep of the building. Leases can be extended when the length of time remaining gets too low, and you can purchase leases for up to 999 years.
Freehold means that you own the building and the land on which it sits in its entirety forever, until you decide to sell it to someone else. A third option is share of freehold. This allows owners of properties within a shared building, typically flat owners, to purchase its freehold as a group. All owners in the building then own a share of the freehold and are jointly responsible for the upkeep of the building.
Current Prices of Property in London
Holland Park: £3,5 million to £5 million for a four-bedroom family home
Putney: £1,25 million to £1,4 million for a four-bedroom family home
- Pam Golding Properties: Seven bedroom Victoria villa (Main image), £12,5 million – email@example.com
- British High Commission: 012 421 7500
- Home Office UK Border Agency: firstname.lastname@example.org
- Trans-Global Migration: 011 807 9245
- Kinleigh Folkard & Hayward (KFH): kfh.co.uk
Text: Claire Barnardo