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Investing in London Real Estate

September 04, 2019
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Investing in London property is not new and has always been popular among Thai buyers due to the capital’s high standard of education, it being one of the world’s most crucial financial hubs, a leading tourist destination, its favorable time zone, good public transportation, a property safe haven, strong legal structure, stable market conditions, strong rental demand, its increasing population, a global leader in research and technology, the demand being higher than the supply as well as an average property price growth rate of 5-8% per year, especially in the prime areas. The Mayor of London, Sadiq Khan, has set a raised target of 65,000 homes per annum to keep up with the demand.

The most important factor for Thais to buy property in the UK is to support their children when studying there. According to the Times Higher Education (THE) World University Rankings, London has four of the best universities such as Imperial College London, University College London, London School of Economics, and King’s College London. Not surprisingly, there are around 279,000 students enrolled in London from many countries. The current number of Thai students in the UK is around 6,000 and we expect this figure to increase over the coming years. Parents want the best possible future for their children; that often means educating their children in the best schools and they are also prepared to invest their time and resources in choosing the best places to live. They want to ensure the safety and well-being of their children as well as a short commute to their children’s schools. The rental market in central London can get quite expensive starting around GBP 850 per week. That is why the majority of parents prefer to spend extra on buying property instead of renting to be in the right area. After their children graduate, they often rent out these properties or eventually resell them for price appreciation on the resale market. For all of these reasons and more, leading UK property developers are increasingly confident in their current and future developments and have identified opportunities to promote their projects to Thai buyers who have strong purchasing power.

As we can see, demand from Thai buyers of UK property is likely to continue rising due to the Brexit uncertainty. The government has promised to take Britain out of the EU with or without a deal on 31 October 2019. Following this decision, the pound sterling has been in sharp decline against the Thai baht, dropping by around 9 – 10% as compared to the same time last year, in fact, the pound has dropped to its lowest level in 22 years.

The price per sq.m. of Thai property has reached THB 500,000 - 700,000 in super luxury projects making it comparable to the price per sq.m. in some areas of London and has further encouraged Thai investors to invest in UK property. As a result, an increasing number of Thai investors have been building a property portfolio in the UK as they expect, ultimately, the pound sterling to increase and they are certain that the London market, in time, will bounce back.

It is therefore the right time to buy property in London and to do so this year to get the best long-term value. To make the buying process more efficient and ensure you choose the right property to invest in, it would be wise to consult a real estate professional or a solicitor before closing a deal.

An article written by Pornpimol Phuengkhuankhan, Director and Head of Advisory & Transaction – Residential Sales Ad Hoc, CBRE Thailand for Bangkok Post dated 4 September 2019.

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