Professionals turn to prime property investments in the Capital

Increasing numbers of those working in professional services are taking a long-term view of the property market and becoming property investors for the first time, reports property consultants Cluttons.

The past six months have seen a 40% increase in demand for property worth around the half million mark from solicitors, accountants and doctors who now see the residential property market as a good investment. With average savings rates less than 1%*, these cash rich investors are looking to invest sizeable chunks of savings either as a deposit to help their children onto the property ladder or without gearing for London property that can be rented out.

The increased awareness of the Financial Services Compensation Scheme covering just £50,000 in any one bank, coupled with low rates of returns on savings, has meant these high-net worth professionals are increasingly turning to residential property as a good home for their hard earned cash.

James Hyman, Partner for Residential Sales, says:

“These traditionally conservative professionals are turning to the London property market where yields and capital appreciation are both predicted to increase over the mid-to long term. Almost 40% of all buyers in recent months have been first time investors from white collar professions such as law, accountancy and medicine. These buyers are location driven looking for quality in a good road or block and property that will attract stable and respectful tenants.

“In addition to buy-to-let investments, many of these professionals are using their savings to help their children onto the property ladder by helping them meet the higher loan to value criteria that most now banks require. These parents are taking the commercial initiative by putting down the deposit to receive better interest rates which makes purchasing a home for their child considerably cheaper than it would be to rent the equivalent property.”

* Average savings rate is 0.98% according to Moneynet.co.uk, 17 November 2009