Is property still a sound investment?

Comment from Lucy Morton, senior partner and head of lettings at Prime Central London estate agent, W A Ellis.

Related topics:  Savings & Investments
Millie Dyson
15th August 2011
Savings & Investments
She said:

"With the incredibly tumultuous week we've all experienced, beginning with the announcement of the US downgrading of its credit rating and ending in the tragic London riots, the question everybody has been asking is where does this leave the prime Central London property market?

"Sadly, the original protest that began in Tottenham escalated into riots on a scale that most of us have never experienced in our lifetimes but this, on the whole, seemed to be an opportunist small sector of society testing the system's reflexes - there is no social or moral basis for this behaviour.

"London will get back on its feet - and quickly, as was seen by the true spirit of the 'Riot Wombles' who met en masse with their brooms to clean up the mess.

"London's reputation as a world-class city wasn't made in a day and it will not be undone in a week. The riots and the unstable financial markets will not cloud the view that London's prime and 'super-prime' areas are a haven of security and investment.

"Financial and real estate markets are of course, diverse phenomena with drastically different rules; they are certainly interlinked but very different fundamentals drive each one of them.

"Gold may be at an all-time high of $1,720 per ounce but shouldn't this figure be $4,000 per ounce to really qualify as a record breaking long-term investment?

"In contrast, if one were to take a two bedroom, 2nd floor flat off Cadogan Square whose value has risen in the last 20 years at a rate of approximately 400+%, i.e. 20+% per annum, it is clear to see the quality of the investment.

"Coupled with the 'tangible' asset that such a property offers and the fact that Harrods and Harvey Nichols are close by, together with some of the best garden squares and the world renowned shopping and theatre districts, one realises why, in spite of the world's crises, the value of this area's real estate is secure.

"It was business as usual in all departments at W A Ellis this week. No sales have fallen through, in fact to the contrary, more sales have been agreed and the Lettings department are heading for a record breaking month. Hopefully the 'blip' is now under control and peace and confidence will be restored in the whole of the country."
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