Many of our foreign investor clients tend to be more comfortable with buying property in London because they were either educated in the UK or live in a Commonwealth country with legal systems similar to that of Britain's.
Having born in London and lived in New York for the past 12 years, it struck me this morning to compare London vs New York.
London at approx $3600 per square foot is more than double the price of New York at $1500 per square foot.
Global property ranking:
Knight Frank and Citi Private Bank ranked New York #1 and London #2 globally in terms of best places for property investment. New York ranked higher in economic activity, political power and knowledge base. London ranked better in quality of life. Both cities are ranked the same #1 and #2 in terms of best cities in 10 years' time.
Our clients from commonwealth countries are more comfortable with the British system of law and property rules. There is a level of uncertainty with venturing to the US. This applies to going for vacation, sending kids for higher education and buying property internationally. I find the apprehension dissolves after coming to the US for the first time for vacation. Then, the US becomes a new favorite place with friendly people, amazing infrastructure, organization and technological advancement.
Both cities have approx 40% foreign born residents but I consider London a more international city. This includes being more traveled and speaking more languages. London is 1 hour away from many different countries which makes foreign travel and exposure easier. The closest countries to New York are Canada (not much of a cultural difference here), the Caribbean and Mexico. Apart from these, it takes 6+ hours of flying to get to another country.
Foreign property investors:
London is more foreign investor friendly in terms of taxes.
New York wins. But food in London has improved a great deal.
Manhattan in more dense, fast paced, never sleeps and transportation costs less. London is more spread out and places close earlier. The UK is a more status based society as is in the Commonwealth countries. Someone with a PhD (or an honorary one) will be addressed as a "Doctor." Beyond that, there are titles that are conferred. In the US, everyone is more equal and there is less distinction.
Ultimately, both are great cities of culture, finance and fashion. For property investors, both cities will offer a safe and stable place for investment.
Wei Min Tan, Managing Director of Castle Avenue Partners, is a Manhattan, New York property broker specializing in condominiums and foreign investors. He was most recently interviewed by the Wall Street Journal in "Foreigners Snapping Up U.S. Property".