Prime London real estate offers investors 'modest growth' potential

The prime London property market will offer investors with personal wealth modest growth potential in 2012, despite the economic turmoil.

That is according to estate agent Savills, which believes that opportunities will present themselves to savvy investors in this market, with overseas money set to continue playing a large role in the UK capital's real estate scene.

Lucian Cook, director of residential research at the company, said that significant short-term growth may be restricted by current pressures on employment and wages of city workers.

He said: "We are forecasting in prime central London that we will actually see some very modest growth in the market.

"Given that we have also got very low interest rates, we don't expect to see significant levels of stock brought on to the market to drag prices down significantly."

With the Olympics set to attract new investors to the London property market this year, the capital is also expected to enjoy long-term price growth.

According to the Land Registry, property prices in London were up by 0.8 per cent in November. Over the last 12 months, the capital is the only region in England and Wales to have enjoyed positive growth, with typical prices rising by 1.4 per cent.

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