Chart Spotlight – Where is the international money flowing?

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5 Golden Rules for Investing in a Successful Buy-to-Let Purchase

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Do Different Governments Affect House Prices

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Whats in the Residential Investment Crystal Ball

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Location Gentrification Population

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What Does Brexit and the New Conservative Government Mean for the London Property Market?

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Post Brexit Presentation to City Investors

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General Election 2015

General Election result will restore overseas investor confidence in the UK, and UK real estate assets, leading to a surge in capital values over the next five years.

This is a very bullish outcome for London real estate markets at all price levels. In the short term (next 12 months), following a 12 month period where policy-risk has subdued this part of the market, we think residential assets above £2m could rally by up to 20%. But equally we think this result is very bullish in the medium / long term too. Over the next five years we think that capital values in the Prime London residential markets could double. This election result will force Labour to confront existential questions about its future and we think it will have to re-position itself as a more “new Labour”, more pro – market party. Any likely federal settlement that is offered to Scotland and Wales by Cameron will force the Labour Party to work to attract English votes and this will require them to move towards a more market-friendly position.

Ten year UK investment window now open

Crucially , we think that there is likely to be a ten year cross party consensus (as there was between 1997-2008) that seeks to encourage wealth creation, foreign inward investment, tight public spending and lower taxes. This will keep UK monetary policy loose and be a big green light for overseas investors to choose the UK in general, and UK real estate assets in particular, and to be able to do so with a ten year horizon. London is likely to be the main beneficiary of these inward investment flows. Accordingly we expect the following over the short and long term:
  • Immediate second half 2015 rally in all London real estate residential assets
  • £2m + market, especially in Prime, could rise 20% over the next 12 months and double within five years
  • Immediate threat of Mansion tax lifted but very possible that some sort of “Commission” is set up to look into residential taxation (from which we think higher Council tax bands would emerge)
  • Imminent significant inward investment into Prime London residential assets from parts of the world where major geo political uncertainty prevails
  • Lower Gilt yields and sterling
  • Very modest rental rises as wage-inflation stays low and the sales market heats up
  • UK based Banks to be taxed less heavily than they feared (with RBS and Lloyds to be privatised soon) and to start to increase mortgage lending
  • This result (particularly the UKIP share of the vote) will help Cameron in his negotiations with the EU over reform before a 2017 referendum.
  • We do not expect the prospect of this referendum to be a major dampener on asset values and on any price weakness/dips we would be buyers
  • No major house-building initiatives leading to the demand – supply imbalance remaining
Valuable London properties

Investment adviser to the Prime London Capital Fund

  • The leading Prime Central London residential fund. Set up in 2007.
  • Best performing IPD UK All Market Lets portfolio in 2011 with a total return of 16.2%
  • Visit the Prime London Capital Fund Website
Properties at Cadogan Square

£10 billion under management

  • Group collects rent for 2,500 tenants (0.04% default rate)
  • Over £65m of rent collected per annum
  • “D&GAM provides a one-stop shop for any residential property investor, research through capital deployment and improvement to management”
Impressive property seen from street

Residential Property as an Asset Class

  • It is estimated that Britons currently pay between £55bn - £65bn to Buy-To-Let property owners*.
  • Against this background, it is unsurprising that institutions, pension funds and global family offices are starting to invest heavily in the sector.

* Source: Economist magazine 12th December 2017