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Part of London’s attractiveness to overseas investors is the relative simplicity involved in property investment in the UK. The legal system in terms of property acquisition and ownership is easy to understand and navigate while strict rules involving the registration of property at the Land Registry mean that deeds are reliable and available.
This has lots of benefits: finance can be less complicated; the property can be easier to sell on; ownership and tenants can be traced. This means that even where rental yields may drop to 4%, as has occurred in some offices in London, investment in the capital’s real estate market remains attractive to overseas investors who need reliability and predictability as well as return.
Such investors come from Hong Kong, where higher taxes in terms of property have been implemented recently in an attempt to curb the sky-high property prices there. In the UK there are fixed bands for stamp duty, and these are unlikely to be prohibitive for wealthy investors. The tax system for corporate entities is also relatively favourable at present.
The ever increasing demand for commercial property in London is set to remain given the economic conditions elsewhere and the steady stream of regeneration and development projects that are already under way or that will be before too long.
Eugene O’Sullivan, of Morgan Pryce, comments, “In London, investors – whether home-grown or overseas – are aware that what you see is often what you get: in terms of the building, the prospects, the yield and the legalities. This confidence in the system as well as the economy is worth a lot at the moment.”
The fact is, however, that outside the prime office buildings of Central London, there is the risk of empty units and increased susceptibility to economic factors.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.