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Berlin, the new East London: Why young Londoners are moving to the German capital
October 6, 2015Article by Clare Moorhouse
A growing number of young Londoners are flocking to the German capital, Berlin, lured by the relatively cheap cost of living, a buzzing arts scene and a thriving economy.
With London’s ever-rising house prices and higher cost of living, is it any wonder that Londoners are fleeing the big smoke in record numbers to seek a better quality of life in European cities such as Berlin?
According to the Office of National Statistics (ONS), nearly 250,000 people are leaving the bright lights of London behind every year and it seems that Berlin is proving to be a popular alternative to the UK’s pricey capital.
Berlin today is recognised as one of the most attractive cities to live in the world for many reasons: it is modern with a strong economy, offers a dynamic culture, and is also extremely safe. The German capital is a favourable option for younger people over other European cities and the high demand for affordable and modern living spaces from renters makes Berlin perfect for property investors.
Indeed, many former Londoners who made the move to Germany’s capital believe that living in Berlin feels like East London did more than a decade ago, before Shoreditch was polished and Hackney became unaffordable.
A tale of two cities
One of the main reasons why Berlin is so attractive to Londoners is the low rent, especially when compared to London. According to Global Property Guide, the monthly sq m price for renting a “prime central London apartment” now ranges from £51 to £64, while in Berlin, the average sq m rental price is less than €10.50 (£7.50 ). While London tenants reportedly spend 72% of their earnings on rent, Berliners pay out just over 20%.
However, Berlin’s rental prices are now rising at nearly twice the national average rate, which is great news for investors looking for healthy yields.
Despite the disparity of living costs, Berlin and London share a lot of similarities: foodie events by former Londoners are becoming increasingly popular in Berlin. A new LSE Cities report highlights the cities’ shared (and growing) preference for cycling and walking over car ownership and Berlin is now said to be rivaling London as Europe’s start-up capital.
Berlin’s growing tech-hub district – Silicon Allee
The German capital is now the home choice for many hi-tech entrepreneurs from around the world, with global giants like Google now opening offices in the city. The ‘Silicon Allee’ is a pseudonym for Berlin’s start-up community, and is now one of the world’s top cities for internet companies.
Berlin’s start-up scene could create as many as 100,000 jobs by 2020, according to a recent report by the global consultancy McKinsey & Co, further strengthening the demand for housing, and in particular rented properties in prime locations such as Steglitz-Zehlendorf. Our high specification studios, one, two and three bedroom apartments at Stadtpark Steglitz starting from just 109,600 Euros, provide investors with gross yields of up to 5.6% – a lucrative and sustainable investment opportunity in this popular European city.
Contact one of our Investment Consultants on +44 1865 202 700 to receive further information on this exciting European buy-to-let opportunity.