A leading property expert has suggested that investors should take more risks with their portfolios to guarantee higher returns.
London has proven a safe haven for potential buyers, with long leases, guaranteed demand and high yields. The Olympics have contributed towards this great interest in the past 12 months, particularly from foreign buyers. London tops the Oxford Economics Health Indicator of regional economies, it is closely followed by regional areas in the north-west and south-west of England.
Mat Oakley, Savills’ head of commercial research, said: “It all comes down to whether you are risk averse or a risk embracer, as the answer will take you down very different routes. The market is split between those who believe recovery is underway – who are the minority – and those who are still waiting.
“The cliché in commercial property is that it’s time for prime – and central London can demonstrate shop and office rents are rising. But if you are prepared to take a bit more risk, step outside London, where you won’t be competing with overseas buyers."
Mr Oakley went on to state that the gap between yields in London and Manchester is at its largest ever, offering investors returns of 3.75 per cent and 6.25 per cent respectively. Furthermore, high-income areas such as Guildford and Chester are seeing demand from owners, meaning that secondary areas may be the way to go.
Prime location may be considered as equivalent to 'London', but next time you want to buy, consider other options.