Property specialists, investors, developers, and home builders have acknowledged London to be a go-to destination for property investment in 2021. Prospects for real estate and investment opportunities in London for 2021 have seen significant improvement – England’s capital has jumped two places in this year’s estimations. This puts London among major cities overall across Europe, offering the best of both liquidity and stability.
Accelerating existing trends
While Covid has had an enormous impact on every aspect of business life, the industry of real estate has adapted well because some of these shifts had already begun to occur. Digitalisation is one aspect that has featured heavily in the recent pandemic. The industry was already undergoing big leaps towards more automated, technology-focused processes. For example – virtual home viewings, scheduled online appointments and zoom calls to show the construction stage or details of the interior – all these have contributed to the real estate market remains one of the most stable industries in the UK.
Lisette van Doorn, CEO of Urban Land Institute Europe, said: “European real estate is at a turning point, trying to work out its future role in society while facing the cyclical challenges following the outbreak of the pandemic earlier this year and the ongoing uncertainty this creates. COVID-19. Has fast-forwarded a number of trends that have already started, for example – digitalization, remote work, and online shopping, but it remains hard to work out the long-term impact.”
The search for yield, which is now even more dominant than pre-COVID, continues to attract investors to real estate, especially core and income-generating, such as residential that continues to appeal to investors, in the ‘safest havens’ across Europe.
Investors look for stability
Logistics and housing have benefited in some ways from recent events. Demand in these areas has been relatively stable. This is another reason why London ranks highly among investors right now, thanks to the UK’s strong economy compared to other areas. Many investors are re-examining the historical risk and return profiles of different types of property investment. It’s clear that investors continue to see Europe’s core cities as safer bets and there remains cautious optimism. With London offering the long-term value for property investment, despite the challenges faced by all major cities, the prospect of owning a luxurious apartment as a second home attracts more foreign investors than ever. The low-interest-rate environment is also a positive factor for many investors. It means there could be an uptick in activity as people deploy their pent-up capital over the coming months.
Moving away from office investment
There has been an unprecedented rise in the number of people working remotely over the course of the pandemic which has become a big influencing factor on how people are choosing to invest. The data shows that residential property investment remains “highly favoured” by investors. In a ranking of the top 10 sectors for investment in 2021, there are three representing residential. These were private rented housing (ranking in 7th position overall), affordable housing in 8th place and social housing at number 10. The report notes that no office sectors made it into the top 10 list this year. Flexible and serviced office space and co-working has also suffered in the ratings. Time will tell whether these areas become more important again in the future.