Buyers from abroad snap up 60 per cent of prime London homes go to

With property prices down by about 20 per cent in sterling terms and the pound worth up to 40 per cent less against major currencies, London property has become exceptionally good value for foreigners. One estate agent dubbed it a "half-price sale".

At the same time, many wealthy British buyers from the City have had to withdraw from the market because their bonuses have been cut or jobs have disappeared.

According to research from estate agent Hamptons International, Britons now make up only 37 per cent of buyers of prime London homes.

The balance is roughly evenly split up between buyers from America, Europe, and the rest of the world. The last group includes Russia, Japan, India, China and the Gulf states — but also Nigeria, Iran, Lebanon and Thailand.

A buyer using US dollars can pick up a London property for almost 40 per cent less than in December 2007, according to Hamptons. A euro buyer can get about 35 per cent off prices a year ago.

For those from countries such as Japan with particularly strong currencies, a London property requiring the equivalent of £1 million of capital in December 2007 can now be acquired for as little as £470,000.

The bargains are beginning to revive a market which saw turnover falling by e 60 per cent at the end of last year. It also reverses a trend that saw the number of foreign buyers start to decline. Lucian Cook, director of research at Savills, said: "There has definitely been an increase in overseas interest since the start of the year because they've started to cotton on to this double discount."

A report on the impact of weaker sterling from Savills concluded: "This could be the year when the hitherto inactive Japanese and central eurozone (French, German, Italian) and perhaps Swiss buyers become active in the London market for the first time."

A pretty house in the quiet Yeoman's Row, near Harrods in Knightsbridge, went on the market last year with a £3.25 million price tag. It failed to attract offers at that level and was finally sold for £2.6 million.

In addition to the 20 per cent reduction, the Qatari buyer benefited from a 15 per cent fall of the pound against the Qatari riad.

A mews house in Roland Way, South Kensington, also needed a 24 per cent reduction in the asking price before a buyer could be found at £1.25 million. This buyer, from Thailand, got an additional discount of 21 per cent when he paid in Thai bhat. And an Italian woman, whose daughter is coming to study in London, decided to buy her a Chelsea flat instead of paying rent.

She negotiated a 22 per cent discount on the mansion flat in Callow Street, paying £443,000. She also enjoyed a further 20 per cent "discount" by paying in euros.

Hamptons research manager Rob Bruce said: "The devaluation of sterling has created an extremely favourable climate for foreign investors in London.

"We have seen a strong increase in foreign buyers over the last few months — particularly from Italy and France. We expect the continued weakening of the pound will bring a steady stream of international buyers to the market over the next six months."

Phil Tennant, London director of Hamptons, said: "While this may be a more central London-based phenomenon, we have had a recent influx of Italians interested in buying as far out as
Richmond.

"The significance of the weakness of the pound should not be underestimated. For many buyers, London is having a half-price sale."