Investing in UK property? Why London is your safest bet

Discusses your options and explains why London will always be a wise choice

For international investors looking to capitalise on the UK property market, it can be difficult to know where to start. 

We will discusses your options and explains why London will always be a wise choice.

When the financial crisis hit the global economy back in 2008, property markets around the world experienced their fair share of falling prices and alarming headlines. The UK was no different. In the aftermath of the credit crunch, the average price of property in London fell 18%, while Manchester fell 20%, Leeds 14%, and Liverpool fell 17%. 

Market falls happen – it is part of a normal economic cycle. What is important is the speed and level of the recovery. As we continue to ride the uncertainty of Covid-19, the credit crisis of 2008 gives us the perfect barometer by which to compare cities around the UK and analyse how they dealt with such a significant economic downturn. 

As you can see from the table below, Central London took just 2.5 years to recover, while Greater London took 4 years. In contrast, Leeds took nearly 8 years, Manchester took 7.5 years, and Liverpool and Newcastle took around 10 years.

The level of recovery is also stark. In the 10 years that followed the credit crunch, the average property prices in London and Central London almost doubled, while Leeds only increased by 29%, Manchester 53%, Newcastle 17% and Liverpool 19%. 

Over the years there have been numerous discussions with clients about the benefits, or otherwise, of investing in London over other cities in the UK. Most people get it – London is expensive and rental yields can be lower. Conversely, the likes of Leeds and Manchester look relatively cheap. The reality is that it’s easy to make the case for any given city if you look at capital appreciation and/or rental yield at a given point in time. But property investment decisions should never be made based on the here and now. And neither should they be made for short term gain. If it’s long term, resilient capital growth you are looking for, history suggests that London is still very hard to beat.


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Investing in UK property? Why London is your safest bet
Bricks n Mortar Global Properties Ltd. 9 August 2020
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