London property 'a wise investment'
22nd Feb 2012
Investors around the UK and the rest of the world are realising that London property is a safe purchase because they are very unlikely to lose out while they own the building, one expert has explained.
Ed Mead, director at Douglas & Gordon, said that the prime central London market remains attractive for investors at the moment, as although some realise they may not get an enormous rate of return, they can be sure their capital value will not be "destroyed".
"That is the principal draw for central London property. You are not talking about big yields – you are only talking about between four and five per cent absolute maximum for gross yields. You are not buying for investment; you are buying because it is a very good defensive play," he added.
His comments followed the publication of a report which revealed that there has been sustained domestic and overseas demand for property in prime central London at the start of 2012.
This is resulting in record levels of competition between buyers for property for sale, while demand remains close to record high levels, the report shows.
Mr Mead noted that housing is appealing because many people have cash which they are very wary about committing to the stock market or any other investment because the terms are quite low and volatility is great.
"Property, particularly in central London, seems to be a relatively good hedge against capital value deprecation. It is providing a small but solid income," the expert commented.
©Zoopla Limited.