Houses are seen in London on Jan 19, 2017. Britain's housing market had its weakest month since just after June's Brexit vote in December as house price growth slowed and the number of homes sold fell slightly, a survey showed. (Reuters photo)

The London property market faced a challenging latter half of 2016, with the UK's vote to the leave the European Union weakening the pound sterling and the capital's property values. Despite the short-term shock, do these conditions present opportunities for Thai buyers to invest in London property?

The London residential market has traditionally proven to be one of the best-performing asset classes, with average values rising by 289% from 1996 to 2007. Despite a slower growth rate after the global financial crisis, London values currently stand at 50% higher than their 2007 level.

While Brexit negotiations may suppress valuations in the short term, the fundamental drivers of London investment demand remain strong, with the weaker pound offering an appealing 20% currency-based discount against the baht.

With a population of 8.67 million, London is the most populous city in Europe and offers sound demographics. The population is also highly affluent, with 292,000 millionaires, of whom 4,400 are multi-millionaires.

Its residential tenant profile is equally favourable. Of 1.8 million people currently renting property, 70,000 earn over £100,000 (4.35 million baht) a year.

The quality of life remains a key demand driver for London residences, with the capital boasting 66 Michelin-starred restaurants, 241 professional theatres and over 200 museums and galleries, in addition to five premier league football clubs.

The city is also one of the world's "greenest" for its size, with over 40% of the total area being open green space, beating New York, Berlin, Paris and Amsterdam. Education adds further appeal, with the capital comprising some of the world's leading schools and universities.  

London property also represents a comparatively secure form of investment, with unrestricted foreign ownership underpinned by a robust legal framework. Developments are offered for sale with building construction guarantees, backed by an independent regulator, and leading developers typically hold strong track records of completing projects within advertised timeframes.

While Brexit negotiations are set to overshadow the London property market over the coming two years, the city's robust economy and world-class offerings of education, culture, creativity and heritage will continue to draw international interest in the capital. Within the context of the weak pound, such a climate presents opportunities for Thai buyers to explore the London residential market. 

Chotika Tungsirisurp is Senior Manager, Research and Consulting at CBRE Thailand. She can be reached at bangkok@cbre.co.th Facebook: CBRE.Thailand Twitter:@CBREThailand LinkedIn: CBRE Thailand Website: www.cbre.co.th