London is one of the busiest and most exciting cities in the world, with limitless attractions and opportunities. People from all over the world choose to join Londoners living in this bustling metropolis, but the cost of living isn’t usually one of the most appealing attributes of this location.
It’s more expensive than Sydney and Seattle, and investors sometimes scratch their heads when trying to work out why London is so expensive.
The supply of houses, for instance gold or fine art, has become so rigid that houses now do have an enormous investment element to them. You need somewhere protected to live long-term? Sad, you have to also spend in a hugely treasures financial asset that might go high or fall by 10% in value in the range of a year, generating a down payment for that and paying the interest on a loan to cover the prices.
London is home to Greenwich Mean Time, and for financial markets reliant on trading globally this means it is the centre of the universe. Able to trade effectively with markets in Asia and North America in a normal working day, it holds a fantastic advantage over other locations.
Being within a short flight of other European capital cities also means it is attractive to international business. With a big reputation of delivering high-performing employees from established universities, London also offers a conveyor belt of hungry graduates ready to work hard to establish themselves in the commercial sector.
Thanks to the United Kingdom’s history as a leading industrial superpower, well-established businesses have dropped anchor in London to maximise opportunities. The reputation of London as being the land of the successful and wealthy also helps to appeal to motivated and talented employees and entrepreneurs.
This is why constructing more homes would curtail rates; even though modern price soars high may not be caused by a fall in building prices. The cost of housing-as-outlay is decided by two cutting edges of the scissors – both interest rates and occupancy rules acting as one cutting edge, and inductile supply acting as the other. Allow the supply answer to demand and housing stops being an effective investment possession.
Supply and Demand
This attraction of wealth, and the relatively small area of London and surrounding areas, meant that undeveloped land became quickly valuable in a highly competitive property market.
Those that have invested in London property usually see a very reliable return. With modern property inventory software tools such as those offered by inventorybase.com, investors from all over the world can manage property remotely, bringing further competition for properties and driving up costs.
The attractions on offer, and the excitement of a cultural hotbed of activity, also bring in a large volume of tourists with disposable income. With a well-established transport system and some of the best hotels in the world, London is one of the most popular tourist destinations on Earth.
This leads to increased prices of consumer goods and the overall cost of living, yet thanks to the abundance of job opportunities and draw of such a hub of activity, the population continues to expand each year.