Though everyone knows that “Change is the essence of life”, it is not that easy to adapt to the changing situations. London is the city of joy and sorrows, hopes and disappointments, and traditions and modern lifestyle. The face of the city is changing rapidly, but the sole remains unbeaten. The famous streets are rapidly disappearing behind huge apartments and villas, but the warmth and affection remain unchanged. Yes, the city is transforming fast, and the process is not always smooth. The most prominent reflection of it is in the real estate rates that attain new heights with the sunrise. Some people feel that the city is going through a strange situation where anything exceptional happening in the city boosts the property rates.
Where will this journey end?
Yes, it is a matter of concern for true London residents. As the gap between income and property prices widens, buying a reasonable home in a good locality is just unachievable. The extraordinary hike in prices disturbs many people. Certainly, London is not a place where investment in property is done just for the sake of having a second home. It is not Bali or Paris. Since properties are extravagantly costly, it is a ground for serious players only.
However, the story of foreign investors is something different. They have deep pockets, and excessively high prices do not bother them. Statistics reveals that a large percentage of properties brought by them are vacant. And most of them are new-build apartments.
Does it mean that London is an under-populated city? Not at all! It is a disproportionately populated city. The disparity is mainly because of property prices. Rather, the population is rapidly growing, and the already cosmopolitan face of the city is rapidly turning into a truly cosmopolitan avatar. The population mix is changing, and people intermingle more frequently than the earlier days. Sociologists praise the situation and call it a “healthy sign” from the point of view of social life.
Does it mean it remains a paradise for millionaires only?
If the core properties are affordable to millionaires only, then what will be the future of the city? It is a question that haunts many hardcore lovers of the city. Will the middle or upper-middle class move to low-rent and low-value places and the core London will be affordable to a handful of people? If yes, then it will be a tremendous loss to the city.
The city has experienced a face-off in last two decades. There are international chains of hotels and restaurants, all world-famous brands, and the look and feel of core London have disappeared up to a big extent. As the process continues, there will be a total transformation. The biggest fear of it is becoming the playground of those who have huge money in their wallet troubles many people. London has a glorious past, and the future also has to be equally glorious.
Are people frustrated with the never-ending rise of property prices in London?
Those who love the city worry about the ever-increasing property rates. Some feel that it is a bubble that is going to burst someday. No doubt, the prices have fallen more than once in last decade. However, the prices went up again and established new records. It is certainly hard to predict the future of the real estate, but it seems that there is no end to it. Even if it is a bubble, it will not burst. There may be an intermittent drop for a few weeks or months. Is it a matter of frustration for some people? Yes, it is; for those who want to own property.
There is no way of finding out whether the increase in the prices is due to valid reasons, or it is just a speculation that drives the market forces. Believe it; no financial expert is so expert to tell it precisely. There is one way of identifying it. Experts say that the fundamentals of the economy should be seen while looking at the property rates. Is the price increasing with the market dynamics or there is some disparity? If it is not, then there is an indication that the price hike is detached from the economic fundamentals. It is a dangerous situation. However, In the UK property prices and rates have increased in the proportion of other factors. Hence, there is a scope for believing that it is a genuine increase in the property value and not just market sentiments.
Experts have sound logic in favor of the UK property price boom
At one side, London property rates (or the UK property rates per se) are being looked with a lot of suspicion by some economists; some experts have concrete counter arguments also. They feel that the property market in the UK is different, and so are the people. The market is reasonably bubble-proof. Though nobody can give a 100% assurance, there are fairly high chances of good returns.
There are examples of super price drop in the history. At the end of 1989, the prices dropped almost one-third and took almost a decade to reach the earlier levels. People felt that property investment was the most disastrous investment. The property market hasn’t looked back after that. The country (especially London) has been recognized as the hotspot for property investment. Wealthy foreign nationals who have a lot of money to invest are coming to London.
The rules of demand and supply govern every market. There are several other places in the world that also assure good returns. When aspirants look at London for high returns, there are people who want to invest in New York for further high returns. However, all look like struggling hard for survival if there is a fall in the global economy. In such scenario, there are more sellers than buyers and a significant decline in the prices. No market can behave differently in such a scenario. As far as current economic conditions, London is a fairly attractive market for real estate investment.