Property investors seeing increased demand for prime central London real estate
Sustained domestic and overseas demand is driving up prices of prime property in central London and causing stock levels to drop.
According to property consultants, there has been a 25 per cent drop in the amount of available housing in central London this year, resulting in significant levels of competition between home buyers for what real estate does come to market.
While such a scenario is far from ideal for landlords looking to get into this lucrative market and list properties for high-earning individuals and couples who cannot afford to buy, it does present some sterling opportunities for landlords who already own real estate in central London.
With such a seller's market, they stand to make a killing if they decide to sell up in the area now - money that could then be funnelled into new property acquisitions in other areas. According to reports, two flats in South Kensington recently sold for more than £100,000 above asking price.
This is borne out by the latest research from the Association of Residential Lettings Agents (ARLA), which suggests landlords are more expectant of selling properties now than they were at the end of last year.
In Q4 2011, the number selling a property in the previous 12 months increased from six per cent to eight per cent. More pertinently though, the number expecting to sell in the future rose from eight per cent to nine per cent.
ARLA suggests that many landlords looked to reshape their portfolios in 2011 but warned this may not be the case this year. However selling prime central property in London at a high price will allow for the acquisition of several properties in high-growth areas.
But, as with any property investment, landlords will be faced with the same dilemma: to sell up now for a short-term gain, or hold onto an asset in the expectation that it will be worth even more in the future.
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