Introduction
For centuries, many have trusted gold to retain its value and protect against inflation. The value of gold has increased nearly 100-fold since the early 1900s. Today, an ounce of gold can still afford a gentleman a nice suit. Interestingly, there are many similarities between gold and prime London properties, both of which are seen as safe investment havens.
Comparing Gold and Prime London Properties
Both gold and prime London properties are tangible assets that do not lose value due to managerial incompetence, unlike shares. Unlike perishable commodities, both property and gold are enduring assets. They are limited in supply and provide protection against inflation and economic uncertainty.
Foreign Investor Confidence
Throughout my 30-year career in the property industry, I have witnessed the unwavering confidence foreign investors have in London’s prime residential properties. This continuous foreign interest has elevated London’s prime properties to a status comparable to gold. The strong demand from foreign buyers seeking a safe haven, combined with a very limited supply of new properties due to strict planning regulations, has resulted in phenomenal growth in the value of these properties.
Illustrative Case
To illustrate, in 1981, I sold an apartment in Kensington next to the Albert Hall for £300,000, roughly equivalent to 1,500 ounces of gold at the time. Today, that same apartment is valued at £10 million or approximately 9,000 ounces of gold. This example shows that over the past 30 years, London’s prime properties have outperformed gold many times over.
The Unique Value of Property
While gold and prime London properties share many attractive features, property also fulfills a basic human need: providing shelter. For long-term investors, I believe that prime London properties will not only prove as safe as gold but will outperform gold once again over the next 30 years.
Conclusion
In conclusion, both gold and prime London properties offer a reliable store of value and protection against economic uncertainty. However, prime London properties have the added advantage of meeting a fundamental human need and have historically delivered superior returns. For long-term investors, investing in London’s prime properties remains a highly attractive and secure option.
