London real estate is an exciting, mysterious world. Yes, you can read dozens of articles on where to invest and stare blankly at charts of market trends. Like a foreign language you may understand the odd word. You may even indulge a few relentlessly enthusiastic estate agents who momentarily ignite your confidence in making a purchase. Then, multiple factors can creep into your mind and before you know it, you have written both the agent and the idea off entirely.
We spoke to the Prime Minister of real estate himself, Roger Collings of Remax Central. With over 50 years of experience, he answers the questions any savvy investor wants to know about what is really going on in the UK’s capital residential market.
TheRichest: Hi Roger, thanks for taking the time to talk to us today. With over 50 years in the industry, what would you say have been the most significant changes in the market since you started compared to today?
Roger Collings: There have been so many. I would say the most significant impacts have been the legislative changes, two of particular importance.
Firstly, the 1979 estate agents act. This was the first act of parliament that was specifically relevant to estate agency. Still, this doesn’t affect lettings transactions only sales. Prior to this, there were only professional bodies that regulated the business. Secondly, the 2008 Consumer Protection From Unfair Trading Regulations Act further dramatically modified the industry. Estate agency has moved towards a much more heavily regulated industry.
Then there are the five recessions I have experienced throughout my career. I really saw the market slow down in 1973 during the oil crisis. 1970 to 1980 saw the biggest inflation in property prices in recent history, rocketing to 400pc. Then on Sept. 16, 1992, the UK came out of exchange rate mechanism, this caused interest rates jump to 15.5 pc. Many people were carrying negative equity and lost their homes in the following years.
TR: What three tips would you give an investor who wanted to make a purchase in the current market?
RC: For the Prime Central London market, investing in smaller properties, such as one or two bedrooms rather than larger. That would be my advice at present. Don’t be frightened to go a little out of the center of the city as there are very good yields to be had from areas that are easily commutable. Purchase with cash if possible as interest rates must go up at some point in the not-so-distant future.
TR: How is the rental market currently performing?
RC: The rental market also slowed after the Brexit announcement. However stock is reducing, and therefore demand is picking up.
TR: Where is the market most active now, sales or rentals?
TR: How do you see the market moving over the next five years?
I wish I had a crystal ball... I will say this country is still not building sufficient housing and the population continues to increase. Therefore, the demand for property keeps increasing. 66 million is the current population and before we have housing stock that meets the demand, Prime Central London will remain a promising place to invest.
Speaking with Roger offered some much-needed clarity regarding the past and future outlook for Prime Central London’s housing market.
Although the only things guaranteed in life are death and taxes, Roger exerted optimism that his fifty years of experience justifies trusting. Despite some big pending changes causing hesitancy, it seems buyers are jumping back into the market. The view of London looks bright.