Opinion

London Still Has Cachet Among Investors

Property in London is still a status symbol for investors, with Savills' World Cities Review preview showing the capital to be the second most expensive city in the world. Beaten only by Hong Kong, London continues to demand high prices for both residential and commercial real estate, meaning that it is still a hub for the world's wealthy.

Savills' report analysed the value of real estate, headline rents and associated taxes and charges to compile their top ten world class cities. It found that the total real estate cost of setting up business in Hong Kong, London and New York is now almost three times more than most competitively prices capital cities.

Yolande Barnes, director of Savills world research, stated: "In the intensely competitive global market for top talent, the cost, quality and desirability of a city lifestyle is an important unit of currency. Business location choices sometimes have as much to do with where the CEO (chief executive) wants to live as economic considerations, but the cost of residential and commercial accommodation for an international business team can have a significant impact on the bottom line."

However, London cannot afford to get complacent, as Knight Frank's Wealth Report revealed that by 2023 Asian countries will be challenging traditional business and property hubs for supremacy. What's more, the pound is continuing to slide, placing the future of the UK in question.

Jeroen Dijsselbloem, the new president of the Euro Group, recently told students at the University of Amsterdam that Britain's finances are becoming a cause for concern, with high national debt and budget deficit leaving the country vulnerable, the Daily Telegraph reported. He claimed a sterling crisis could be up ahead - worrying for those who remember the last crisis in 1992.

These comments have also not been welcomed by the government, which is on the verge of delivering Budget 2013 and is at a critical juncture with Europe. Nonetheless, David Cameron has stressed that the coalition will not go back on its economic plan and austerity measures.

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