hey guys!

i'm new to this site, but wanted to try and get some feedback on what people think of investing in london...i know it's bl**dy expensive, but i have just seen some details about a property fund being launched in central london investing in residential property (it was on wealthbriefing.com) and the editor there seems pretty keen on these guys.

do you think it is over-inflated, or do you think there is some room for growth with the olympics coming up? they are "only" looking for £50k which seems to be pretty reasonable for getting into london...would be very interested to hear your thoughts.

thanks

john

over the past few years there have been a lot of frightened investors which means London has become a buyer’s market, and investors can expect returns of 6.5% to 7%.Stratford and East London have benefited from substantial government investment, and more will be poured in if London gets the Olympics. Prices have already gone up but there is still money to be made.
The government has invested a lot of money in redeveloping the East End. it would be better value for money than Stratford and East London as prices haven’t increased yet.Elephant and Castle is being regenerated and is very close to central London.

Hi John,

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would have to disagree that London is currently a buyer's market.There is a great shortage of decent property in decent areas.

Might not be a bad idea if you're looking at the top end of the market only.

See here:

London house prices rose at the slowest pace in five months in June after prices fell in more than half of the UK capital’s districts in a sign that the property boom in one of the world’s most expensive cities may have reached its peak. From: UK property glut slows rising house prices

I've never liked the fact of property funds as its still a company your investing in a good old bricks and mortar investment still the best option as you can sell rent or live in it if the bubble bursts.

I wouldn't touch London unless it wasn't my money.

1. If you have 50k, I suggest you keep it in the bank. Sainbury's are offering 6% interest rate, which is better then some of the rental returns in London or elsewhere.

2. In Central London / West End the returns are really low 3%-4.5%. Whilst other parts of London you are looking at 5-6%. Whilst in a bank you are getting 6%. Plus any one who is involved in residential knows that you have to refurbish the property, you have void periods, defaulting tenants, repairs, insurance, damage to property plus day to day management - so the real returns are a lot lower.

3. You argue, that investing in property is still worth it, as the property prices could go up, but with the Bank Of England determined to bring housing market to its senses!

4. As for the Olympic effect - you do realise this is all B**L****. They are going to be spending billions simply for a 3 week event! What a waste of money!. No benefit to day to day people of London. It would have been better if they invited Disney Land to London or some other enterprise that bring prosperity in to area. At least you get visitors all year round rather then for 3 weeks.

5. As for giving 50k to some investment company?. Can you trust them? How well did the city invest our pensions? And what about those days of booming stock investment? I still remember the B**L**** trading reports from banks that said BT was going to have a target price of £15 per share only to find it crashed to be worth a petty £1.98 per share!.

yes the yields in London are not the best, but if you pick the right property you wont have too many void periods as peeps will always want to rent in London.

And yes the yields are not ther best, but there is always positive capital appreciation. London house prices I believe will always increase annually at a higher rate then the rest of the country and I have just read recently that some expert reakons house prices in London will increase by 40% in the next 5 years, thats better then any interest rate you will ever get in a savings account!

Hi ,

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Good Luck