Economic Factors

Capital Growth

Bought in areas where demand is high, property in England can produce reliable returns on investment, such as in the capital city of London where some house prices have been seeing increases of an average 11.3% p.a.

By far the most lucrative form of investment property in England these days comes in the form commercial premises, while central London offices are star performers and office returns in July 2007 reached 17.1% p.a. Retail property has fallen back with 7.9% p.a, and industrial properties have recorded a return of 10.6% in the year to July. Looking ahead experts predict total returns in the calendar year 2007 to be around 9-10%, with offices outperforming all sectors at around 14.3% p.a.

Rental Growth

The Royal Institution of Chartered Surveyors (Rics) has said that the English buy-to-let sector in general is seeing rents rise at a record pace, with levels of rent received also set to break new records in the coming months. Temporary economic uncertainty has created an ideal platform for buy-to-let investors to cash in on rising rental levels which have showed an increase of 3.8% in the year to July 2007. Rental income is usually subject to long term leases which provide a level of guarantee for investors seeking a reliable market in which to operate.

Off-Plan

"Pure investment" strategies are viable options in many areas of England, enabling you to purchase off-plan property at the lowest possible prices. Investors purchasing as early as possible with a minimum "money-down" payment and then selling prior to completion are gaining substantial profits from both residential and commercial properties in England.

Economic Stability

As a member of the G8, the UK is a highly industrialized economic nation with the sixth largest GDP figures in the world. This means England is a booming economic environment requiring a strong supply of residential and commercial property to sustain this growth.

The UK economy continues to grow at a brisk pace and is forecast to expand by 2.8% this year, slowing to 2.4% in 2008 and 2.5% in 2009. However, the volatility of the Stock
Market in recent weeks and the uncertainty surrounding the financial markets could potentially have an impact on growth if the situation persists.

The City of London has long been recognised as one of the world's leading financial centres and new statistics have confirmed that the rest of London is now following suit. PricewaterhouseCoopers (PwC) has predicted that by 2020 London will overtake Paris and Chicago to become the fourth largest economy among world cities.

Availability of Lending Products

A wide availability of over 3,000 mortgage products makes England an easy investment option for many buyers. The mortgage market remains strong and lending figures for October 2007 have totaled £18.9 billion, with overall lending up 6% on the previous month. This figure remains healthy partly due to a large amount of re-mortgaging facilities being approved.

Poorly Performing Shares

Worried by the volatility of share markets from the turn of this century, many investors have moved out of the equity market to balance their portfolios in property. Traditionally, real estate has been regarded as a safe investment as values are less volatile than shares. Rental income is usually subject to long term leases which also provides a level of guarantee, and is now more predictable than dividend income from shares.

Overseas Buyers

It is widely believed that foreigners will keep house prices up, especially at the top-end of the market in London. So far, 2007 has seen a record level of transactions from overseas investors, who have accounted for almost 43% of total property purchases.

In conjunction with the new Investor Trends section of the Propertyshowrooms.com site, we can confirm an increase in general interest from USA buyers whose numbers have increased by an astounding 200% in many overseas locations, including the UK as a whole.

High Demand

Latest figures from the government show the number of households in England is expected to increase by 223,000 per annum, without taking immigration figures into consideration. Current house building projections show a rate of 200,000 units per annum, indicating a clear shortfall to meet demand in several highly populated areas of the country.