City payouts boost housing market
The property investment market is set to be boosted as record City bonuses are paid out.
The square mile’s top employees have been rewarded with substantial payouts with the average bonus expected to be around £23,000 whilst an estimated 3000 bankers will receive bonuses of over £1 million .
Experts at The Homebuyer Show (17 to 19 March, ExCeL London) believe that much of this capital could find its way into the housing market as investors seek to maximise their funds through property investments.
A survey of over 200 exhibitors at this year’s Homebuyer Show, comprising of estate agents, house builders and property investment professionals, reveals a significant uplift in buyers from the City. Of the estimated £7.5 billion1 paid out in bonuses this year, potential demand as predicted by the survey reveals that over £3 billion is likely to be spent in the property market over the coming weeks and months; equivalent to nearly 200,000 average priced homes.
Nick Clark, manager director of The Homebuyer Show, commented: “The start of the calendar year is traditionally an exciting and busy time for estate agents in London as many City workers choose to spend their bonuses in the housing market. Although market growth has slowed since the property boom of recent years, property is still a smart place to invest money with plenty of exciting markets offering enticing returns. Property continues to outperform other investments, including FTSE shares, and offers multiple benefits with capital gains, rental yields, and often personal use to consider.”
Bulgarian Dreams, an overseas investment company based in Moorgate in the heart of the City, report that they have seen business increase threefold in January, selling over 120 apartments in the last month. Adam Woolley, Marketing & Communications Manager of Property for Life, another property investment company, comments: “Every year we all eagerly await the payment of City bonuses as this can have such a dramatic effect on the market. In recent years, so much of this ‘extra’ money has been invested in property that it has had a strong influence on the direction of the London property market and in turn has rippled out into the national market.”
Opportunities on offer at this year’s Homebuyer Show include off-plan discounts from developers, agents and property investment clubs, and a wide selection of overseas property in countries ranging from Spain, Cyprus and Bulgaria to India, China and Thailand.
Nick Clark comments: “As well as the obvious investment opportunities within the property market, using a bonus payment to fund a move to a bigger home gives a tangible asset that accrues value so you are benefiting immediately and in future. Alternatively, although with some risk, there are a host of new markets emerging that could offer substantial returns if market forces prevail. This is exactly the type of investment which can appeals to those City workers who are use to speculating on assets and deals in their professional lives.”