London continues to retain its world city crown: JLL

Despite facing a myriad of challenges and tough competition from other leading cities, London continues to retain its world city crown, according to the latest Global Cities report from global real estate services firm JLL.

Consequently, London remains one of the top investment hubs across sectors, including tech and property. The cities were judged on an ever-increasing range of criteria from how they’re improving placemaking and building long-term resilience to meeting the expectations of businesses and local residents apart from fuelling innovation economies.

London is the city that best ticks all the boxes, fending off strong competition from New York, Paris, Singapore, Tokyo, Seoul and Hong Kong, according to JLL’s demand and disruption in global cities report.

Three key factors are helping to maintain London’s position as a global leader – a strong and agile tech sector; investment in infrastructure and an ambitious urban transformation.

London tops the global chart for talent, with 58.5 per cent of its workforce educated to degree level and 14.5 per cent employed in high tech sectors like AI, fintech, cybersecurity and blockchain. The city has a vibrant start-up scene that attracts international investment. In the year to June 2019, the UK’s tech sector produced one ‘unicorn’—a company valued at $1 billion—each month.

Ongoing projects are strengthening London’s domestic infrastructure. Crossrail plans to increase rail capacity by 10 per cent in central London. HS2 meanwhile, currently under review, aims to link London with cities including Birmingham and Manchester to boost economic growth. Across London, redevelopment projects are transforming the cityscape.

All these factors have propelled London to the top of the world cities. Investors continue to show faith in the UK in view of the strong fundamentals of the market.

London among top buy-to-let investment markets

London, one of the top residential property markets in the world, continues to figure among the top-5 destinations in the UK for investments into buy-to-let (BTL) sector.

According to the latest Buy-to-Let City Tracker from Aldermore Bank, London continues to perform well across several parameters, such as average total rent, the best short-term returns through yield, long-term return through house price growth over the past ten years, the lowest number of vacancies as a proportion of total housing stock, and percentage of the city population in the rental market.

What makes London BTL market attractive is that property prices have increased faster at 5.5 per cent a year on average over the past decade. The rental prices are strong at ￡630 per room per month while the property prices in London (￡617,238 on average) are high compared to the rest of the UK. Annual rental yields of a new buy-to-let purchase start from 3 per cent. In 2019-20, the rental growth was 4.4 per cent, one of the highest for any UK city.

Corporate companies, international travellers, businessmen, medical tourism, students and UHNWIs are some of the key growth drivers of the BTL market in London. Consequently, many companies, backed by institutional investors, are investing in the London BTL market. Anticipating higher demand, landlords are also expanding their BTL portfolio in London.

If you are keen in venturing into the London buy-to-let market, Strawberry Star can advise you on properties that can fetch attractive returns. Contact me at [email protected] for further details.