Live Dubai: London and Dubai property review

London: Eighty per cent of buy to let landlords own one property.The powers that be simply want to implode that area of the market through tax and stamp duty and give those currently living in their parents guest rooms the ability to buy . A very unfair policy to those landlords who were simply trying to create a retirement pot. A simple change of planning ( ability to build upwards)and then increased supply 20 years ago could have dealt with this matter.With fewer Europeans coming to the UK to work , demand for rentals will no doubt drop leading to average rentals falling, thereby creating a perfect storm to force the Buy to Let landlord to give up his one property investment. London is definitely a case of central London and everywhere else London .With the weak pound and low interest rates it makes central London very attractive to Chinese and Middle East investors . A change in either sterling or base rates will no doubt affect that market but with strong Laws and the multiculturalism that is London still makes it a safe Haven for foreign investors. Location , prime views and amenities will be key for these units to hold their values when the market turns . It will be unlikely they can be sold on to the domestic market anytime soon or after , so will remain as owner occupier or rental units for long times to come , thereby offering a last chance to grab one of those units with views of the Thames! More supply and I estimate and uptick by 2019/2020 potentially with an increase in base rate means prices in the UK have to drop. I am personally eyeing some new build units in west London and already have seen a 9% fall in price from last year , a 20% fall makes it palatable for an end user , a 45% fall makes it yield 7% , the only situation I see the later happening is if base rates go to 3.5 % and borrowing goes to around 5.5 -6.5% . My take , if you want Uk inventory , start buying pounds now and even if prices don’t drop there is a potential for 11-20% uplift in sterling before we hit normality versus the dollar.

Dubai: With the pound being so weak a cafe latte, that costs £2.50 in the UK costs £4.37 in dubai , Dubai’s living costs certainly don’t feel cheap anymore compared to the UK.Packages that used to allure western expats simply don’t exist and with oil prices remaining low , potential for VAT are bringing a headwind for difficulty for all. But it’s not all Doom and gloom, no income tax , sun around the year , good security and personal safety and studios from AED 390,000 yielding 7% still make dubai attractive but with more inventory I cannot see capital growth. I personally wouldn’t buy further out in the sand dunes but I’m not giving up on Dubai; I for one am still buying distress sales in prime locations and if I Were to get 10% rental yield wouldn’t mind worrying about flat capital growth. Even at 7% rental return , why would you sell. Once in cash what can you then do with that money. If dubai were to offer a Green card or expat passport of sorts , follow as Singaporean style of work and reward , this city could grow in leaps in bounds , on the other hand a stagnant population of 3M and troubles lie ahead….. but Dubai seems to be able to re-invent itself so why leave……