London Is Ripe for Investing

As rental and real estate prices hit 16 year lows, London might finally be ripe for international investment. The British capital once known for being one of the world's top 3 most expensive cities has become relatively affordable--at least by London's standards. Based on Mercer's 2009 annual survey of expensive cities, London is presently less expensive than both New York and even New Delhi. Thanks to a significantly weaker British Pound Sterling and a housing market bust, new opportunities in up and coming neighborhoods abound.


Of course, these opportunities won't last for long. London will once again re-claim its title as one of the most expensive and most popular cities. At the heart of London's re-emergence will be the 2012 Olympics Games. The games and all associated projects promise to inject billions of dollars in investment into the local economy. Construction on a new Olympic Park and Village is underway and will undoubtedly transform the previously blighted, industrial East End in the Lower Lea Valley. These surrounding communities are now London's hottest up-and-coming investment destinations.



Olympic Park & Village


Over 3,300 housing units will be created for Olympic purposes but will be available to the public after the Games have ended. This will serve as one of city's newest neighborhoods, right next to the newest big park to be built in London in over a century.





Stratford


Locating in Stratford gives you extraordinary access. Located directly east of the Olympic Park in the Newham borough, you're in the center of Olympic venues. The area is home to a new town center, dubbed "Stratford City," which has converted an old rail yard into a town center complete with new shopping centers, housing, and high rise office towers.


Transportation to Heathrow, London's busiest international airport will be mitigated with the addition of the Crossrail underground rail line. The rail station will be linked to Stratford's busy underground hub station. Stratford will also welcome an international rail station, linking the community to the "Chunnel" (High speed Eurostar link underneath the English Channel) and providing easy access to Paris and Brussels.


Home prices in the area did not hold well during the recent real estate bust; however, we expect that to change. Stratford's face lift and new infrastructure will add value to property. Home sales currently average amongst the lowest in all of London at just 212,000 GBP or just $ 338,000.



Hackney (Hackney Central, South Hackney, Shoreditch)


To the west of the Olympic Village and directly east of the City, lie the East End neighborhoods of Hackney, one of London's most cosmopolitan communities. Once plagued by a bad reputation, the borough has recently become gentrified and has attracted a horde of cafes, bars, and art galleries. A new Tube extension will link Hackney Central station to the more affluent Chelsea on the West End.


Home prices in Hackney actually rose about 3% in 2008 compared to a city-wide slump. The average home sells for 311,000 GBP ($ 497,000) or 40% less than in Westminster, home to Buckingham Palace and Parliament. It's important to consider that those 311,000 pounds would have converted to about $ 606,000 had you bought at this time last year.


Bow


Located in the borough of Tower Hamlets, Bow is another of London's most accessible places. Of course the name of the borough is synonymous with the Tower Bridge and the Tower of London, both of which are located here. The area is at the crossroads of the reemerging East End to the Northwest, Stratford and Olympic Park to the Northeast and The Isle of Dogs/Canary Wharf business district to the South. It has a Tube station and is served by the new Docklands light rail system.


Bow is one of the most undervalued residential areas north of the Thames and the average home price is 310,000 GBP ($ 487,000). A year ago, that same price in sterling would have been $ 620,000.



Greenwich


With its strategic location and important role in the Olympic Games, Greenwich is a superb investment destination. Located across the Thames from Canary Wharf, on major rail lines, and close to London City airport, this previously sleepy borough has awakened. Thanks to its waterfront, parks, and the famous Millennium Dome, Greenwich will host more than one-third of all Olympic venues. As a result, the borough council offers support services to businesses who wish to benefit from the games by locating here.


Aside from business opportunities, Greenwich offers among the best property investment opportunities in the city. Home prices here average just 242,000 GBP or roughly $ 381,000, making it one of London's most affordable areas. Of course a year ago that same price in quid would have been over nearly a half million dollars.




For Britons, London real estate offers a nice bargain, but for Americans, properties are available at fire-sale prices. While everyone would enjoy the pleasures, conveniences, and glamour of Kensington, Chelsea, and Westminster, the best buys are in the reemerging areas well to the east of Her Majesty, the tourist traps, and square mile financiers.


* Sources for real estate price information: BBC and Land Registry of England and Wales.


* Photos courtesy of: Greenwich Council, London 2012 (ODA)