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Overseas property investors are here for the long haul

Overwhelming. That’s the only word I can use to describe the interest from overseas investors at our latest multi-stop property tour in Malaysia and Singapore. As usual, we joined forces with some leading Malaysian and Singaporean banks and we expected the sessions to be packed – and again they were, in some locations we had two seminars in a day.

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What do overseas investors think of London property?

We’ve a strong track record now for hosting these informative seminars but I think one of the most interesting aspects is the Question and Answer sessions which we hold at the end of each talk, where we get a real chance to gain an insight into what buy-to-let landlords are thinking.

What came across this time is that investors are cautious about spending money and they’re looking for a solid long-term investment. They’re prepared to put the work in to plan new investments, researching areas which are currently undervalued and where rental demand is growing. London locations such as Ealing and Greenwich which offer an easy commute into central London and where there are some fantastic new developments are just two areas where investment has poured in from overseas in the last year. Dickens Yard in Ealing West London and New Capital Quay in SE10 are two recent developments where many have already bought.

Developing an investment strategy

Most overseas investors are aware that property values in London vary hugely between Tube zones and postcodes but need some help in identifying areas that are undervalued. Banks will often only loan when properties are in Zone 1 nor 2 but ongoing infrastructure developments such as the imminent arrival of Crossrail also mean that the London rental landscape is changing rapidly in certain areas. This is having an impact on investors’ decisions about where to buy a rental property and of course, this is another issue that investors were keen to discuss.

Generally, people were also keen to find out more about which types of property are most popular. They are aware that one and two bed apartments which appeal to young professionals are in highest demand. And they know that there are fewer tenants around with budgets over £600 per week, so again, recognise that smaller apartments are performing better than larger properties.

New Capital Gains Tax has little effect on London property investments

Even the recent Government announcement about the introduction of Capital Gains Tax for overseas investors hasn’t dampened enthusiasm for London property and we met only a couple of investors who are considering exiting the rental market. Most recognise that selling a property now won’t help and by doing so, they’ll miss out on London’s continuing potential for capital growth.

So, another interesting trip to the Far East. These property tours and one-to-one meetings with overseas investors really help us to keep our ‘finger on the pulse’ of the investment property market. It’s certainly keeping our international offices busy. It’s incredible to hear how well long-term investors have been doing and good to know that we can play a role in their continuing success.

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About the Author

For 35 years Anita has been the driving force behind Benham and Reeves’ success as it has grown from a single branch in Hampstead, to one of central London’s oldest, independently owned sales, letting and property management companies. Anita's vision has driven the expansion of the business to offer a complete range of property investment related services from under one roof, from purchase to handover, furnishings and/or refurbishment to lettings and property management. Read more about Anita Mehra here - Read full profile

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