Increasing number of Australian buyers are purchasing property in London with a view to renting them out, it is claimed.
According to London property search company, Sourcing Property, they are buying as an investment. The company has acted for six Australian buy to let clients in the past three months alone.
‘The Australian dollar is extremely strong right now, largely due to Australia being so commodity rich and the boom in China’s demand for its commodities. We’re therefore seeing a number of Australia based buyers, mainly who are purchasing for an investment. They view central London property as a relatively safe investment, and they’re getting a saving on it due to the favourable exchange rate,’ said Jo Eccles, director of Sourcing Property.
‘Most of our Australian clients typically buy a one or two bedroom apartment between £400,000 and £800,000. Some of them fly over to the UK for about a week to look at the options, whereas others buy remotely and never physically see what they’ve bought. In this case, we do the search, shortlist and purchase via email and telephone. Because the rental market for good quality one and two bedroom flats is so strong in London, their buy to let investment is usually rented out within a couple of weeks at most,’ she explained.
One such buyer, Helen Rooney, who holds a senior HR position at Johnson & Johnson in Sydney, recently purchased a one bedroom property in Clerkenwell through Sourcing Property.
‘An Australian friend of mine who owns property in London encouraged me to look at purchasing a property as part of my investment portfolio, the view being that staying out of the equities market was a good thing at this point in time and that London is an attractive proposition given the strength of the Australian dollar,’ she explained.
‘I was also comfortable with London as an investment destination as I used to live in Clerkenwell when I worked in London years ago. I wanted to buy there as it’s a great place to live with a mix of restaurants and bars, and it is walking distance to many work locations. The property I bought was rented out at full asking price within one week of going onto the market, giving me a gross rental yield of nearly 5%. I aim to keep the property for the long term, renting it out until I own it out right,’ she added.
Before she arrived in the UK to view properties she discussed her requirements with Eccles including locations and what she could expect for her money.
‘We also discussed the types of property which are in demand from tenants and are expected to continue being in demand over the long term. Jo searched the market on my behalf and once I arrived in London, we viewed the best six properties together. I then brought a friend of mine to see four of them for a second time. Given my limited time in London, it was amazing that by day three of being there, I made an offer on the first property Jo had shortlisted and two days later, the sellers had accepted my offer,’ Rooney said.
‘I had to return to Australia shortly after my offer was accepted and it’s been so useful having someone on the ground to oversee the purchase and ensure that the process went through smoothly. Jo liaised with my solicitor and the estate agent throughout the process and once the purchase completed, she arranged builders and cleaners, recommended appropriate rental agents and coordinated furniture deliveries. The flat rented out within a week for full asking price, so I’m thrilled,’ she added.