Overseas buyers flock to London's top neighbourhoods
Half of the properties in London valued at £1m (€1.1m) and above are now owned by international buyers, according to high-end estate agents, as more favourable exchange rates and tax benefits continue to attract overseas investors.
Fifty one percent of prime central London property is now owned by buyers from overseas, according to estate agents Savills, up from 44% last year, while rival
High end agent Savills said 51% of prime central London property is now owned by foreigners, up from 44% from last year, while rival Knight Frank said the figure has risen from 35% to 43% over the last 12 months.
Charlie Bubear of the Savills’ Knightsbridge office, said that transactions with international buyers during June and July were double levels recorded in April and May, adding that this group account for around 70% of the enquiries for top-end addresses in Knightsbridge, Kensington and Chelsea, and around half of all actual sales.
Knight Frank said that within the overseas market, buyers from Europe, Russia and North America are being replaced by those from Africa, Asia, Australia, China, the Commonwealth of Independent States and the Middle East.
Buyers from these markets doubled their interest in high-end London properties during the second quarter, while interest from Europeans, Russians and North Americans dropped around 11%, according to Knight Frank.
David Adams, head of residential for London agent Chesterton Humberts, which has found that in May and June this year 50% of central London property sales were to foreign buyers, said that tax benefits have played their part.
He said: “Central London property ownership is changing from people who do have to pay tax, to people who don’t. There is a major incentive for foreign buyers as non-resident, non-domiciled owners are only taxed on income derived from property situated in the UK or work performed in the UK. UK residents selling in London are frequently moving offshore to reduce tax liability.”
He said there are also an increasing number of UK buyers who clearly hold foreign currency and so benefit from the falls in sterling alongside international buyers.
Other agents believe that the improving economy has led to increased interest from UK buyers. HSBC-backed Property Vision said earlier this year activity was mainly from dollar and euro buyers, but over the last two months enquiries are increasingly from sterling buyers.
Charles McDowell, who runs an independent consultancy in Knightsbridge, agreed: “The flood of international buyers has slowed somewhat, London property is still an attractive prospect, although domestic buyers are beginning to give them some competition.”
--write to twilkinson@efinancialnews.com
del.icio.us
Digg
Newsvine
reddit
StumbleUpon