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Strong Interest in London Property by Thai Investors

March 18, 2020
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CBRE, a leading international property consultant, found an increase in Thai property investors in London, while London residential property remains in high demand and the pound sterling continues at a low rate for the fifth consecutive year, revealing 2020 as the best time to enter the London property market.

“The London property market is becoming a popular investment choice for Thai top-end property investors, with Zone 1 and Zone 2 being the most popular locations for purchases,” said Ms. Pornpimol Phuengkhuankhan, Head of Advisory & Transaction Services - Residential Sales Ad Hoc, CBRE Thailand.

“The first group of investors is made up of the upper-class families of Thai students studying in London who aim to provide a home away from home for their children. Ideally, they purchase residential properties that are 500–800 metres from tube stations to provide easy access to their children’s universities. The second group invests in London properties for rental return purpose and capital appreciation,” she added.

London Map by Zone

Source: CBRE

With London’s highly developed transport network across the capital, Zone 3 and Zone 4 are easily accessible to central London. These zones are residential areas where the land prices are significantly lower than Zone 1 and Zone 2 and are considered a good value for rental return investments for Thai investors. A THB 15-20 million budget would equivalent to a one-bedroom in Zone 3.

Depending on the budget, a GBP 1.2 million (THB 50 million) investment can get them a one-bedroom residence in a prime location in London, a two-bedroom residence in Zone 2 or a three-bedroom residence in Zone 3 or Zone 4.

Average Prices of New Built Houses in London

CBRE Research shows house prices in London are expected to increase up to 1.6% by the end of 2020 and 3.5% by 2021 before reaching 3.9% in 2022. In five years, it is expected to increase 10.5 % in total. In addition, London rental growth has also risen by 10% in the last five years and is expected to grow by 18% in 2023. One of the main reasons for the growth is the unmet demand for house completion. Based on the London Annual Plan by The Ministry of Housing, Communities and Local Government, the house completion has failed to reach its target of 66,000 units per annum by less than half.

London House Price Forecast

Source: CBRE Research

“The Pound Sterling has remained at a low rate since 2014, while top-end property prices in Bangkok have now reached a level so close to the prices in London. Within the same budget, buyers can now choose between owning an international property or a local top-tier one,” added Ms. Pornpimol.

Apart from being the headquarters of many global companies; London is one of the world’s financial centres, a renowned tourist destination and an international hub for higher education with over 40 universities and colleges.

In UK, there is no restriction on renting or owning real estate that foreign property investors need to worry about. However, UK’s property buying process requires the hiring of a solicitor and a thorough evaluation of the property before making a purchase. “It is highly recommended that the buyer consults a real estate agent from a reputable agency for investment advice, after-sale service and coordination with developers in the UK.” Ms. Pornpimol commented.

CBRE believes investing in London property by Thai investors will continue in 2020 as they are expanding their property portfolios to London and taking advantage of favourable exchange rate and potential for capital appreciation and rental returns.

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