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stability draws foreign investors to the city

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Foreign investors may be looking to make an international money transfer to invest in London properties as the city represents a "secure" investment, according to London Central Portfolio.

Instability in the Middle East and North Africa alongside the debt crisis across the eurozone that threatens to engulf member states, such as Spain and Portugal, are putting pressure on the "safe" London market.

"We expect to see above-trend growth in the coming years," commented Hugh Best, head of investment management.

"That will be buoyed by the fact that sterling is still very weak compared to a lot of countries, our cost of debt is very low and there is a lot of foreign money coming in because people see it as a safe haven asset where they can park their money during a volatile economic environment."

Property experts Knight Frank reported that London prime property prices climbed by nearly ten per cent over the past year, meaning that prices are now 35 per cent higher than the post-credit crunch trough of March 2009.

Residential prices rose by 0.7 per cent in July, boosting values to a record high, while rents grew by one per cent in the previous three months - pushing prices above their March 2008 peak.

Mr Best attributed much of this upwards pressure to foreign investment spurred on by political and economic instability in international markets.

"People are looking to get their money out of their home countries [and] into somewhere where there is a secure economy and secure political situation," he explained, adding: "London is a very secure place to keep your cash."

His comments follow those made by Mike McCudden of Interactive Investor, who explained that foreign businesses are looking for money safe havens.

"General equity trading volumes have been fairly low... as investors scratch their heads and figure out where to invest under the sheer volume of information, which is pulling markets in all directions," he explained.

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