Reports suggesting that London has become the world’s most expensive city to live and work in, are highly significant, in the opinion of Simon Morris.
Simon Morris, the London-Based Property Specialist
As a London-based property specialist, who uses his expertise to advise UK property investment funds on how to maximise profit potential, Simon Morris understands the changing dynamic of the property market in the capital.
Economic growth has caused this market to boom, which is why it comes as no surprise that according to the Guardian, London is now more expensive to live and work in than New York, Paris, Sydney and even Hong Kong.
London More Expensive Than Sydney, Paris, New York and Hong Kong
The study, undertaken by estate agent Saville, concluded that due to the strength of the pound, as well as rising rental costs, per individual employee the average cost of renting somewhere to live and lease office space has climbed to $120,000 (£73,800).
This figure means that London is pricier than any other global economic hub. No other city except New York, Paris and Hong Kong has a price range of over $100,000 per employee for the combined annual cost of renting office and residential space; none of these cities have totals that eclipse London’s.
London Property Prices Rise by 18.4%
Whilst the strength of the pound has contributed to the situation, the main catalyst is undoubtedly property prices, which have risen by 18.4% in the past year alone. There has also been a strong rise in office rents. In its latest report, Knight Frank, for example, said that they had climbed by 9% in the City and 8% in the West End.
The Saville report went on to explain the phenomenon by suggesting why prices have risen in the Silicon roundabout area. It said that “Silicon roundabout, coupled with affordable residential accommodation, helped put the capital on the technology map. But gentrification has priced out new start-ups, and the vitality of central London locations are at risk as they become too expensive for the types of occupiers that made them attractive in the first place.”
London Property is High Risk, High Reward
At this point, Simon Morris wold suggest that investment in London property is a high risk, high reward strategy for any UK property investment fund. Yes, this property is becoming exorbitantly expensive, but it’s still in demand, meaning that if handled appropriately, it could still prove lucrative, especially if you follow Simon’s advice on how to invest in London without committing to a sole purchase.