The London housing market has always been regarded as a safe haven by investors and it will continue to be so
We live in interesting times. After the Brexit vote and Trump election last year, there could be further shocks ahead with national elections across Europe in the coming months.
The populist, anti-establishment mood seems to be taking hold. Many people feel disenfranchised from mainstream politics and are voting for change. On the one hand, this makes life exciting; on the other, it generates nervousness and uncertainty: the very scenario that encourages investors to seek safety.
This is why I think the London housing market will remain top of international investors’ hit list for many years. It has always been seen as a safe haven and will continue to be so.
Like any market, London has hotspots as well as areas faring less well. But the overall picture remains one of a strong performer.
Research by Halifax based on data from the Office for National Statistics shows the total value of private housing in the UK grew by £1.9tn over the past decade, with London and the South-east accounting for £1.1tn of that growth. Yes, a recent report published by Rightmove found that nearly a third of London homes were being advertised with reduced asking prices, but the same report also confirmed that realistically valued homes and flats were selling within just 71 days.
Could the London property market have peaked? There is not much evidence to support such a theory. On the contrary: Crossrail, other infrastructure investments, continuing growth in global wealth (M2 money has increased by 60 per cent since 2007) and uncertainty about other parts of the world all play in favour of the capital.
There are plenty of reasons to believe that London property, especially prime central London property, will remain popular and a sound investment for many years to come.
Talk of trouble ahead is much exaggerated.
Peter Izard is business development manager at Investec Private Banking