Offshore Guidebook | Real Estate Investor Magazine Offshore Guidebook 2014 | Page 46

LONDON BY MIKE SMUTS Safe Haven Destination Good value on a global scale? T he London property market did rather better than anyone might have thought du r ing t he recession. In fact, in t he last decade, L ondon has faced some of t he most difficult challenges a global city can, from terror attacks and a banking collapse, to a hung parliament and an apparent housing collapse. Yet, London took it all in its stride, shrugging off these blows like the heavyweight champion of the world that it is. Resilient property market In London, the average price returned to 2007 levels two years ago. Today it is two-and-a-half times the national average, at £435,034, and 17% higher than in April 2013. The seeming immunity of London’s property market has long been attributed to be a result of its status as a ‘safe haven’ – an investment location in which assets will retain or even increase their value in the face of turbulence in other parts of the world. London’s property prices are directly affected by economic and political factors overseas, according to new research from the University of Oxford which 44 Offshore Handbook 2014 measures the impacts of ‘safe haven’ investing on London house prices. Britain has a long and uninterrupted history of political stability, recognition of property rights and maintenance of the rule of law, giving international purchasers conf idence that assets purchased in London will not be confiscated. Taxes on capital are relatively low and acquisitions can be structured eff iciently, so Britain remains an attractive investment location for people domiciled abroad. Safe haven Its reputation as a safe investment, cemented during the financial crisis and recent periods of political instability all over the world, means there are today more reasons international buyers purchase a property in London than there are stops on the tube map. Propert y in the UK capital has picked up a reputation as a sensible place for wealthy people from around the world to park their cash when their own countries are going through a period of instability. It’s an attractive idea, especially given the undeniable inf lu x of overseas money into London during recent times. www.reimag.co.za