Investors Should be Cautious of Prime Property
Pricey properties in so-called safe havens, such as central London and New York City, have increased in value during the economic crisis, and wealthy investors are now looking elsewhere for assets with lower risks.
Investors Should be Cautious of Prime Property
This trend has created a small boom in some areas, as the value of prime property continues to rise, while the rest of the country steadies.
Within London, house prices have soared to record highs. Investors from struggling economies, such as Greece and Spain, plan to remove their money from the Eurozone.
Prices of prime London homes are now almost 50% higher than they were at their lowest point, in the dip of March 2009.1 As overseas investors rarely have property to sell, the more of them that enter the market, the lower the supply of homes becomes.
Market experts now warn that prime property is over-valued, and that investors should contemplate selling their assets. Prices inflated by certain circumstances will probably become steady. Rises in prime London properties have already begun slowing, dropping to 6% in the year to June 2012.1
Estate agent Savills expects prices to plateau over the next 18 months.1
A slowdown in the housing market for prime property has been caused by growth in Stamp Duty for houses worth more than £2m, and a 15% charge on properties bought and sold offshore.1
Experts have not predicted a price crash in the near future, however, for property investors, buying outside of prime property areas could provide better returns.
1 http://www.justlandlords.co.uk/news/Investors-Should-be-Cautious-of-Prime-Property-1377.html