London has been named the second-best city by seasoned investors, property developers, lenders and advisers as the go-to destination for potential property developments and investments next year.
Experts have analysed the prospects of real estate and investment opportunities for the city of London and have projected that these will significantly increase moving into 2021. The data from PricewaterhouseCoopers and the Urban Land Institute‘s reports show the capital will jump two places in the estimations.
The recent reports focus on the way coronavirus has affected the real estate sector, and saw Berlin taking the top position. The top-ranking cities have been assessed as the best locations offer both liquidity and stability for investors.
Existing Trends to Accelerate
The coronavirus pandemic has been a pivotal factor in next years prospects and, consequently, digitalisation is an aspect which has revolutionised the industry during the lockdown months. With the property industry’s move towards technology-based processes, the markets have adapted and weathered the COVID storm nonetheless. As the mini-boom continues, it is not only London that is proving a safe place to invest in 2021.
Due to these new methods, next year, seasoned property investments have predicted that London’s property trends will continue to accelerate. In order to determine whether a location is a reliable place for your buy-to-let property investment, a number of factors are taken into consideration. Within this evaluation property prices and rental yields are reviewed in relation to tenant demand and house price growth. In addition, population figures, regeneration projects, transport links and career opportunities are also added into the mix. These metrics enable the performance of the location’s buy-to-let and property markets to be approximated, as well as its future prospects.
Property Investors Looking for Stability
London has achieved its ranking of second in Europe due to the stability it offers property investors. Despite the uncertainty of coronavirus, demand has remained relatively stable within the capital. The UK’s economy has managed to stay strong in comparison to other areas, which has allowed the housing market to benefit.
Investors, developers, lenders and advisers are all re-examining the historical risk and return profiles of all the varying avenues of property investment. And, therefore, Europe’s core cities are proving to be safer options, allowing for investors to remain cautiously optimistic. With London increasing its rankings by two places, experts appreciate the long-term value in the UK capital.
Moreover, investors can make the most of a low-interest-rate environment; this could spark a small increase as more people may choose to deploy their pent-up capital over the coming months.
A Retreat from Office Investment
A significant repercussion from 2020 is the increase in the number of people who are now working remotely. Due to the coronavirus pandemic, we have all been encouraged to stay safe and keep our distance; this has resulted in remote working and more of us creating home offices. While it is difficult to determine how long these working arrangements will last, they have already had a significant influence on how people are choosing to invest.
The data shows that residential property is still highly favourable by investors. In a ranking of the top ten sectors for investment in 2021, there are three representing residential property: private rented housing ranked 7th place, affordable housing was 8th place, and social housing saw 10th position. No office escorts made it into the top ten this year. However, after such a turbulent year, the UK property market has stayed strong and offer great investment opportunities for investors, developers, lenders, and advisors alike. And with London’s jump up the rankings for next, 2021 is looking hopeful.