A comprehensive new study spanning from 1980 to 2017 suggests that the prime central London (PCL) sector is the ‘most resilient’ subsection of the UK property market – and the most likely to yield impressive returns for investors.
In-depth research carried out by CapitalRise over the years has revealed that, in the face of two significant economic downturns, PCL properties have managed to recover their pre-downturn values at a much quicker rate than any other segment of the London market, or the wider UK market.
It suggests that average PCL values took just 23 quarters to climb back to their pre-downturn levels following the economic downturn in 1989, in comparison with the 45 quarters it took the remainder of the London property market to recover.
Similarly, PCL values recovered much more rapidly following the more recent recession of 2007 – with average values taking just ten quarters to reach pre-recession highs.
Elsewhere in London, values took approximately 21 quarters to recover.
Uma Rajah, CEO of CapitalRise, says that the data should give investors confidence that a PCL investment is always a safe one.
“Prime central London property prices tend to follow a seven-year cycle,” he said.
“Our research should help to reassure investors that PCL is the most resilient property market to invest in, and that it is likely to bounce back strongly from this softening of demand as Brexit causes temporary uncertainties.”
He added: “With low interest rates meaning returns on cash savings are close to zero, investors at all levels should be looking at alternatives.
“Property is often considered a safe investment – and London property in particular, with demand generally high as a result of the UK’s convenient location for global business and its thriving cultural scene.
“Prime central London property is the most resilient segment of the market, and investment opportunities in this area are becoming more and more accessible,” he said.
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