Estate agency boss tips London to remain good investment prospect

 
Estate agency boss tips London to remain good investment prospect (iStock)

London will remain a strong long-term property investment prospect, despite its current wobbles amid uncertainty over Brexit, the chairman of global estate agency Knight Frank has said. 

Many have questioned whether the capital will end up with a diminished role as a global business and financial centre once Britain leaves the EU, with the underlying assumption being that if this is the case any property investments there will consequently be less valuable. 

However, Alistair Elliott told the South China Morning Post that rumours of London's death as a property hotspot have been greatly exaggerated. 

He remarked: “The markets have stood up (to Brexit fear) incredibly well. If you roll back the clock two years, people were giving gloomy forecasts; it hasn’t happened. 

"We have the details of Brexit to come [and] I do not believe it will be as aggressive an experience for London real estate markets as people originally thought.”

Mr Elliott explained that the downturn in London is likely to be a brief one, which will work against any short-term 'flipping' strategy, but not a longer-term investment. 

He advised: "Buying to sell in six or 12 months time, I would be cautious. Buying to sell in five or ten years, I’d say: carry on."

Of course, not everyone is so optimistic about London. A contrasting view was provided by Richard Kirby, manager of the £1.2 billion F&C Commercial Property Trust. He told Telegraph Money: "We are getting out of London while we can". 

Recent surveys have certainly not made pleasant reading for London investors. The latest Hometrack figures showed that in the last year the capital's prices rose by just 0.8 per cent, making it the third-weakest performer of the UK's 20 most important cities.

The two worse performers were Cambridge at 0.1 per cent - another pro-Remain city that may now see less investment in its high-tech industries - and Aberdeen, where prices have plunged by 7.2 per cent thanks to the low oil price. 

However, it seems at least some property experts are convinced London's downturn may only be an historical blip in an upward long-term trend.