The last few weeks have seen concerns regarding the Chinese economy, the falling price of oil and the impact this is having not only on economies but also worldwide stock markets. There are been concerns that some investors may well pull their money out of the London property market, which has been buoyant of late, but every time this happens there seems to be another group of international investors ready to fill any gaps?
Are there really any international investors who dislike London property?
The lifting of sanctions against Iran is expected to have a significant impact on the London property market with estimates suggesting that up to £70 billion of assets will be unlocked. While information coming out of Iran can be fairly unreliable at the best of times, it is estimated there are 32,000 high net worth individuals, 65 with assets valued at in excess of $100 million and four billionaires. It is difficult to say with any real confidence whether these figures are correct but there is also no doubt that the lifting of sanctions against Iran could help the London property market.
Growing economy in Iran
The lifting of sanctions is expected to have an almost immediate impact upon the economy of Iran with GDP expected to rise by around 5% in 2016. When you bear a mind sanctions were imposed in the 1970s and further extended just a decade ago this is a monumental change for the country. Concerns regarding the breaching of money transfer regulations meant that many banks were uncomfortable dealing with Iranians although thankfully these issues are no longer relevant.
We can only estimate how many international companies will be looking towards the Iranian business market to extend their trading activities. Even though the country has well documented oil reserves, the non-relationship with the Western world had a major impact however there will no doubt be many opportunities for businesses to exploit in the new era. The vast majority of the new business is likely to go to American companies, with America leading the way on lifting sanctions, but there will be many opportunities for other international businesses.
Demand for London property
Again, bearing in mind the changing situation within Iran and its relationship with the Western world it is difficult to make any forecasts with real confidence. Some real estate agents in London believe demand from Iranians buyers could increase by 25% this year. It is worth noting that the UK and London especially is already home to a number of Iranian nationals with some suggesting figures of 80,000. These are certainly exciting times for Iranian investors with enormous markets now open to them after years of restrictions.
In many ways it seems that as one set of foreign investors are rumoured to be leaving the London property market, or at least reducing their exposure, there is another ready to step in. Those who follow the London property market will be well aware that “experts” have attempted to talk down property prices time and time again to no avail. There are many reasons why London is so popular including the position of the UK within Europe, the currency situation, a strong economy and perhaps above all the fact London is for many people the centre of the financial world.