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Why invest in a London property?

Several reasons have led London to emerge as one of the top overseas property destinations for discerning Singaporean investors. Attracted by the UK’s economic stability, superior rental yields driven by high demand and limited supply, and the potential for significant capital appreciation due to ongoing regeneration and infrastructure projects, buyers from the Lion City are increasingly turning to the UK capital’s thriving property market.

positive outlook for the London property market in 2024

This trend is further fuelled by Singapore’s property regulations, such as the Additional Buyers Stamp Duty (ABSD) on second or more properties and favourable currency exchange rates. In this blog, we delve into the top reasons Singapore property investors are drawn to London, exploring some key factors that make it a preferred investment choice.

Stability and resilience

London stands out for Singapore property investors due to the UK’s resilient economy and property market, which bounced back from pandemic-enforced downturns. The most recent data shows a boost in buyer confidence, as the inflation rate dropped to its lowest and the economy experienced its fastest growth in the last three years.

This resilience, along with the UK’s reliable legal system, instils confidence in long-term investments. Moreover, London consistently ranks as the best student city, attracting Singaporean investors who purchase properties to establish a base for their children’s education. These factors, alongside the city’s global stature and vibrant lifestyle, make London a compelling choice for overseas property investors.

High rental demand

Rental demand

According to Zoopla’s latest report on London’s robust rental market, even though rental growth has increased only 6.6% from last year, compared to the 16% growth in 2021, there is still high demand for quality homes. At Benham & Reeves, we receive over 15 enquiries for every available home as rental demand in London has more than doubled from the pre-pandemic average of six. Furthermore, our dedicated China and Japan Desk, supported by 21 branches across the metropolis, ensures our landlords get high-calibre corporate tenants to maximise their rental income.

Growth in property prices

Growth in property prices

With average house prices increasing by nearly 80% in the last ten years, London’s property market has shown tremendous growth and opportunity for long-term capital appreciation. Some areas, such as Newham and Waltham Forest, have experienced over 100% growth, highlighting the potential for returns on investment. This accelerated growth due to demand pressures have made London an appealing option for investors seeking dynamic growth, further solidifying its status as a prime investment destination for Singaporean buyers.

Currency exchange and stamp duty

Currency exchange and stamp duty

The strengthening of the SGD against the GBP in the past few years has encouraged many property buyers in Singapore looking for overseas investment to consider London as their first choice. With forecasts predicting a further weakening in the UK currency, booking a London property right now could be a prudent financial decision.

Stamp duty is another consideration for investors looking to buy their second property in Singapore. The ABSD for citizens in Singapore on the purchase of their second property is 20% and goes up to 30% for subsequent property investments. Comparatively, the UK’s SDLT, which ranges between 5-12% with an additional 2% surcharge for non-residents, makes better economic sense for investors to buy their second property in London instead.

Investing in London property offers numerous benefits for Singaporean investors. London’s status as a top global city, renowned for its employment and education opportunities, complemented by a booming property market and high rental demand, make it an attractive destination for overseas investment. These factors, combined with the city’s economic stability and growth potential provide a compelling case for choosing London over many other foreign markets.

At Benham & Reeves, we are at the forefront of bringing exciting new London properties to investors. With an on-ground presence in Singapore for the last 25 years, we have developed a wide range of services to help investors not just purchase but also earn consistent incomes from their London investments. If you’re an investor looking to get on to the London property ladder, contact us today.

Singapore property market performance: Urban Redevelopment Authority (URA) / London house prices: Office for National Statistics (ONS)

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About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 15 international offices.

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