The capital and rental values of residential property in London have been growing for over 20 years. The cost of acquiring residential property in London has consistently increased more than each of the FTSE-100 index, GDP and inflation throughout this period. This strength is due to the UK's relative economic and political stability, London's position as one of the world's leading financial and cultural centres, constraints on the supply of new property and growing institutional interest in the residential sector.
The directors believe that the key drivers for this continued performance in the capital and rental markets are:
- London is widely regarded as a secure, liquid market for international capital;
- London is considered a relatively safe and enjoyable place in which to live and work; it is also one of the world's leading financial and cultural centres. These factors attract demand for both owned and rental property from UK nationals as well as investors and executives from overseas;
- The population of London is forecast to grow substantially in the medium term while the supply of new property is constrained by lack of land and planning restrictions. This shortage of supply is particularly prevalent in the more affluent areas on which K&C will be focusing; and
- There is an increasing trend for people to rent property due to the flexibility and relative affordability of renting compared with ownership.