FAQs

Who is London Central Portfolio Ltd?

LCP specialises in investing in London central residential property on behalf of private investors in the UK and abroad. They have almost 20 years of experience in approaching the market as an asset class.

What are your services?

The company offers a fully integrated service for investors, identifying the best market opportunities, arranging the purchase, refurbishing and furnishing the property through to subsequent letting and rental management.

Where do you offer these services?

We operate primarily in the very centre of London, which is broadly covered by the Royal Borough of Kensington and Chelsea and the City of Westminster, which includes areas such as Mayfair and Marylebone. However, we will consider searches in other specialist niche areas.

How much will I need to spend in London central?

The minimum entry budget including purchase price, related fees, any refurbishment costs and furnishing for rental occupation will be between £500,000 and £600,000. This will get you a one bedroomed flat in one of the more emerging areas in prime London central. For a two bedroomed, two bathroomed flat, the entry budget will be between £750,000 and £1,000,000. Of course, within this budget, you can gear-up, meaning that your equity contribution can be significantly lower.

Whar other costs do I need to consider?

There are a number of acquisition and establishment costs, such as professional fees (acquisition, government tax, legal and surveying. There will also be furnishing costs to prepare a property for rental occupation. As a rule of thumb, these combined will cost around 10% of the capital investment. If a property needs full refurbishment from top to toe, you may be looking at around 12.5% of the capital value but this will be assessed on a case-by-case basis.

Who are your clients?

Our clients come from the UK and all over the world. They are high net worth investors based in over 20 countries, united by the fact that they recognise the investment opportunity in London central but wish to outsource the expertise and day-to-day management.

Why invest in Central London?

London Central residential property has seen consistent growth in prices and a strong professional rental market. Since 1969, prices have doubled every five to ten years. Its recent performance over the last eight years, suggests this growth is sustainable. There is always a shortage of good stock available in the mainstream market and therefore demand remains buoyant. The successful Olympic Bid will further stimulate the market.

How do your services differ from an Estate Agent?

We are not an Estate Agent whose remit is to sell the properties they “have on their books” at the best possible price for their vendor. Instead we act for the purchaser and look after their interests throughout the investment. Our job is to guide them through a complex market and maximize the profit opportunity. Our relationship is ongoing and not transactional.

How do your services differ from a Property Finder?

A property finder relinquishes responsibility once a property is found and bought. They may have little or no knowledge of the rest of the investment process and will be in no way financially accountable for their recommendation.

LCP, on the other hand offer a fully integrated service from the initial identification of the property to final management. We can recommend a select group of solicitors and surveyors, and trusted advisers on finance tax and trust issues and liaise with them during the conveyancing process.

Once we have refurbished and furnished a property, we market this through a core group of local agents. Once tenants are identified we will prepare the tenancy agreements and undertake the complete management of the property. Our service is seamless, convenient and accountable.

What distinguishes the London Central market from the UK residential property market?

The London Central market is relatively uncorrelated with the rest of London and the UK. It is an international market driven by world macro economic and political factors rather than UK factors. It has therefore been sensitive to world events such as the threat of a US recession, the dot com bubble, 9/11 and the conflict in Iraq. This causes minor fluctuations in both volume and value despite an overall upward trend. The rest of the country has been fuelled by low interest rates, high level of employment and scarcity of stock. These will continue to be important factors.

How has the London property market performed over say, the last 10 years?

Land Registry statistics which track all sales in England and Wales show that house prices in central London have almost doubled between 1998 and 2006. This is on trend although the stronger growth was in 2005/6. This is an exciting indicator for future growth. Combined with net rental income, (i.e. income after running costs), the value of an investment would have grown by two and a half times.

Capital growth has been on average 8.5% per annum with a potential return on equity invested (assuming a 70% gearing on the purchase price) of over 300%.

What fees do you charge?

We have a property search and purchase management fee of 2% plus VAT of the agreed purchase price of up to £1,500,000. Thereafter the percentage fee reduces. This is a success fee that covers all the research involved in getting the best properties and managing the conveyancing process thereafter. There is also an initial up front payment towards market screening which is deductible from the fee above.

Letting and rental management charges are at 15% plus VAT of gross rent and there are a number of other charges dependent on the service.

Why invest in London central now?

London Central continues to be one of the most attractive cities to work and invest in. It is an international market, not a domestic one. It is a blue chip world-class stock and in conjunction with a low-interest rate environment bodes well for investors.

London will host the 2012 Olympics which bodes well for the medium term. Recent host cities have benefited from a “halo effect” in the run-up to the Games, where property prices have risen at rates above the regional standard.

In addition, there is a loss of faith in conventional markets. Property is increasingly becoming an important dedicated asset class in its own right and will provide investors with a market that has recorded long-term consistent growth, with low volatility. It can provide significant performance and diversification benefits within a balanced portfolio.