Eton Place in London, where the London Recovery Fund is buying flats on behalf of investors.

The London Recovery Fund remains open to subscriptions for a limited time only, and is already starting to buy properties after its successful initial closing on New Year’s Eve, says fund marketing executive Paul Joseph.

“The Recovery Fund aims to double an investor’s money in just five years. At present the fund is investing in one and two bedroom flats in the platinum postcodes of London Central to rent to corporate tenants.”

“A global centre with financial and trophy status, London Central’s international allure underpins demand. Meanwhile, strict limits on building and a growing global buying population squeeze supply, ensuring its long term attraction.

“The first sustained fall in prices since 1989 provides a window of opportunity for investors to enter the prestigious and exclusive London Central residential property market at a much more affordable level. The SA rand is performing very well against the pound, which means that, based simply on exchange rates, property is  already discounted by 20% compared to early 2009. However, the pound is expected to strengthen over the lifetime of the fund, so investing in the Recovery Fund could be a very effective rand hedge, as well as providing strong capital growth.”

Joseph says over the last 40 years UK property prices have doubled on average every eight years. London Central has been no exception with prices doubling between 2000 and 2008. Despite recent market falls, the stimulus of the low cost of sterling, cheap debt and the capital’s increasing appeal should cause prices to follow long term trends and double again by 2016, he says.

Map of prime London investment areas.

“With a minimum investment of £50 000 (or less), compared with around a minimum of £500 000 for direct investment,  the fund makes investing in prime London Central residential property far more affordable and accessible. The entry price ticket of £50 000 is particularly popular with South Africans because it sits comfortably with offshore allowances whereas direct investment will probably cost too much and be too daunting.

“The Recovery Fund has negotiated a borrowing rate of just 1% over UK Base Rate, providing cheaper mortgage finance than most private investors could obtain directly. The Recovery Fund is based offshore in Jersey and is structured to pay no income tax in the UK. It is also structured so that South African investors should not be liable to pay capital gains or inheritance tax in the UK. In other words, it allows investment in one of the most acclaimed capitals in the world and provides highly attractive tax breaks.”

Joseph says the Recovery Fund will buy around 25 flats in all the platinum postcodes of London Central, enabling investors to avoid settling their cash on one single property, and providing the professional expertise and ‘hands off’ management that investors require.

“The timing of the launch of the Recovery Fund coincides with the seasonal lull in the market when there is typically a 5% drop in prices during the winter months.  LCP’s Recovery Fund will acquire properties before the market picks up,” says Joseph.

Call Paul Joseph on  +44 (0) 20 7723 1733, email paul.joseph@londoncentralportfolio.com, or visit www.londoncentralportfolio.com.

Map of prime London investment areas.