Amsterdam, an unusual alternative for UK real estate investors

on Feb 11, 2015

Though not usually considered to be a major area of interest for UK based residential property investors, Amsterdam is a city that offers attractive opportunities for those looking to invest in a major European capital within easy reach of London.

As well as flights taking only one hour to reach London, Amsterdam’s residential property market offers surprising value for investors looking to make a decent return on their investment in the medium term (about five to 10 years). As well as a buoyant residential property market, Amsterdam also boasts low income and property tax.
In the short term, the outlook for property appreciation in 2015 is positive with the number of transactions expected to increase by between five and 10 percent, while property prices are expected to grow by 2.5 to three percent, according to Ger Hukker, Chairman of the Netherlands Association of Real Estate Brokers and Real Estate Experts (NVM). The city, which is ranked 10th out of 35 for quality of life in OECD rankings, is also seeing demand for residential property rise due to a shortage in the supply of new housing being built.

Figures show that typically there are 10,000 new people every year looking to buy from a stock of roughly 3,000 to 5,000 homes. This continued demand has seen the market return to the peak levels of 2007, with the average price of property in Amsterdam increasing by 6.6 percent in the last quarter of 2014. Currently residential property prices in the Dutch capital are averaging €245,000 (£185,134).

Alex Koch de Gooreynd, a partner at Knight Frank, says: “Prices are rising, there is a slight shortage of stock, it is a huge potential investment opportunity. You can get rental yields of 4.5 to 5 per cent and good capital returns. The new developments offer two-bedroom apartments (from about €500,000) which will rent to young professionals in a heartbeat.”
With the question of affordability in London becoming a topical issue in main stream media, buy-to-let landlords wishing to invest in a market that will provide them with a steady stream of rental income could find Amsterdam a very tempting alternative, particularly due to its proximity to the UK.

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