Home in London ... are you game ?

With the economic meltdown in Europe and the bank failures in the US, there was a huge decline in property values from Barcelona to New York. Good property bargains were for the asking, it was a buyer’s market. London too faced a similar credit crunch and in such a scenario it was largely thought that real estate prices here too would take quite a dressing down. The soothsayers had been predicting that the London prices which showed no signs of falling were just a bubble holding out ready to burst anytime and were not justified in any way, but London bucked the trend. There was no substantial decline to speak off and whatever impact the economic situation had was limited to the prices remaining stagnant for some time. Virtually all the realty majors and the property agents underestimated the strength of London property market which despite of credit crunch and a weakening economy, managed to stay afloat. A major contributer to this buoyancy was the overseas interest in its real estate which  remained unabated. Perhaps they took a leaf from Warren Buffet's philosophy to "be greedy only when others are fearful" and saw the trying times as a buying opportunity. The real estate naysayers were left quite red faced when the prices jumped up a further 10-15% in the recent past, contrary to their opinion.

What actually worked in London’s favor is the fact that the appreciation seen in the prices is more due to it becoming a top notch international destination in a progressively globalized world. In an increasingly affluent world it is not just a business destination but also a favored spot for people looking at buying second homes. The realty price in London is no longer merely a function of the economic growth in UK but has more to do with the fact that London has a new found universal appeal. 

Unarguably, London is a beautiful city - it's impossible to escape its elegance and charm. One can totally relate to Samuel Johnson's sentiments when he famously said "when a man is tired of London, he is tired of life".Though New York might be buzzing and vibrant but it’s not exactly, as alluring. London is enchanting all around … from Hyde Park to St James Park and if you want the countryside experience in the city then look no further than Hampstead Heath, just 6 kms from Trafalgar Square, one of the most loved green spaces in London.

The property market in Central London or to be more precise in Zone 1 is fuelled a lot by overseas buyers … the Russians, rich Middle East sheikhs and the emerging nouveau riche in India, China and Far East who continue to invest in this city. It is the international city of choice for its acceptance of multifarious cultures, great infrastructure, well linked to the other Euro zone nations and above all it has emerged as a safe place to invest in times when finding safe assets is a challenge. Most importantly, it is an English speaking country and very few nations give this kind of comfort and instant connect, other than USA. London perhaps beats New York in the sense that it is more centrally located from a global standpoint and is just like New York, a 'melting pot'.

Coming back to London, there are the all too well known boroughs of Chelsea, Knightsbridge, Kensington, Mayfair which are much sought after by anyone wanting to buy a home in the heart of London. But these properties have a premium on them and might be expensive. Notwithstanding, such unaffordability the latest report in the Telegraph envisages an increase of almost 25% in the next 5 years in Chelsea and Kensington townhouse prices.

For somebody wanting a small and affordable corner which could double up as a vacation pad when in town, and also an area which is clearly upcoming  and holds future promise, (along with the fact that it is in the coveted Zone 1) is Earls Court (SW5). It has great connectivity with two tube stations - Earls Court (District and Piccadilly lines) and West Brompton (District line) serving it.  There maybe more affordable options in other Zones but Central London would seem to be an attractive proposition if we were to merely look at it from the fact that prices are mostly bound to rise here (or at best remain stagnant even in  economic downturns) because of the burgeoning demand for property in this area, which is soon likely to face a supply cul-de-sac. This also would mean easy liquidity for somebody wanting to offload their property. 

However, it is important that before one looks at buying a house abroad a fair amount of diligence is undertaken. Best to spend a little to avail the services of a reputed estate agent who can apprise one of the merits and perils of different locations. A legal counsel would be handy in appraising the title of your property. Also, one would need to bake in the other expenses involved in the transaction which could pad up the final cost. It would be prudent to look into the tax implications involved, the inheritance laws of the country, the maintenance cost of such a property, the stamp duty laws etc. - a well worked out buy will save you a lot of unpleasant surprises and heartburn in the future. This having said, there is a lot to say for owning property in London (Central London, if you will), provided of course you can afford it ... for London shall for many more decades continue to remain one of the favorite destination for the cosmopolitan man (and woman)  and unarguably rank as one of the most lovable places on Earth.