London remains an attractive bet for Middle East investors looking to expand their property portfolio, according to a new report from property investment firm IP Global. 

A number of outer London locations are showing particularly high potential for strong returns as price growth spreads from the city centre.

The UK capital’s population has just surpassed its 1939 peak of 8.9 million, and is now expected to reach some 11.3 million by 2050. The city meanwhile continues to wrestle with a housing shortfall that is a long distance from meeting demand.  

While the end of 2014 witnessed a small slowdown in growth, this should be put in the context of an average price increase of 11.1 per cent throughout the year amid lingering uncertainty over Stamp Duty and Mansion tax proposals as well as traditional investor caution ahead of the general election, the report said, adding that forecasts still point to “growth of 22 per cent in the years up to 2019”.

Of particular note, places like Lewisham, Sutton and West Drayton have the potential to outperform given significant regeneration work being undertaken, strong local economies and the coming arrival of Crossrail, a new high frequency, high capacity railway for London and the South East, it noted.

According to IP Global, Ilford, situated northeast of London, is shaping up as one of the best locations for property market returns. The town forms part of a significant commercial and retail centre surrounded by extensive residential development, while thousands of commuters a day take advantage of Ilford’s convenient location to travel into central London. Property prices are predicted to surge when Crossrail arrives.  

Paul Preston, Director, Head of EMEA (Europe, the Middle East and Africa) at IP Global, said: “Investors in the Middle East have an emotional draw to London – people understand the market and see it as a great place to travel to and enjoy the British heritage. I personally think that more and more people are buying property in London for investment purposes, whereas in years gone by the trend was for GCC buyers to purchase real estate in London more for personal use.”

IP Global, which has offices in the UAE cities of Dubai and Abu, is an end-to-end property investment company that sources worldwide real estate with growth potential.