London House Prices the Same in Dollar Terms as a Decade Ago

The strong dollar, combined with a quickly declining pound, means that London house prices are the same in dollar terms as ten years ago. This opens up a sea of investment opportunities for overseas buyers, particularly in the US.

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Zoopla’s Index of central London residential values, adjusted for currency, reveals that those sat on US dollars can get more for their money today, than any other point in the last ten years.

In dollar terms, London house prices are also 30% lower than in 2014. This means that, for US buyers, there remains plenty of room for growth, making long-term investment an attractive option.

House price growth in the UK

UK house prices have been on an upwards trajectory for decades. In Zoopla’s House Price Index, published in September, a steady 4.2% year-on-year growth rate was recorded across London. To no surprise, the capital had the highest average price at a value of £524,400.

In 2000, the average price of a property in London was just under £150,000; today that value stands at almost £550,000. Despite the financial crisis in 2008, where house prices fell by 15% across the country, London properties are worth around three times more today than they were two decades ago—and are almost double what they were ten years ago.

Why invest in the capital?

London is considered one of the financial and economic capitals of the world. As a famously open and free market, the city is a magnet for global business and investment. In 2022, the UK saw a total of 1,589 investment projects by FDI, creating over 80,000 new jobs. The economic impact of these investments is expected to exceed 7 million.

Property is one of the most coveted investments in the UK, with demand outstripping supply, robust capital appreciation, and strong rental yields.

In July 2022, Savills released its mainstream capital value forecast, in which it predicts London house prices will rise 8.2% by 2026. Savills also expects UK rental values to increase by 19.9% over the next five years—with an even higher increase of 22.2% across London markets.

For those looking to make a rental income, now is a good time to acquire property in London. Demand is already outstripping supply, and the number of homebuyers is quickly declining due to rising cost of living and mortgage interest rates. This is leading to a booming rental demand across the country, but especially in the capital.

Positive long-term forecasts, an extremely high rental demand, and a history of house price growth continue to attract domestic and international investors to the London property market.

Today, foreign investors are in a great position. With the sterling trading at historic lows, overseas buyers can get substantially more for their money right now. Those sat on US dollars are keen to take advantage of the best value they have seen in two decades—and reap the rewards of a lucrative market in the years to come.

Fancy a luxury home of your own? Contact us today to discover available properties in London.