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Buyers from abroad snap up 60 per cent of prime London homes go to
Mira Bar-Hillel30 Jan 2009
ALMOST two-thirds of property buyers in central London are foreigners taking advantage of the collapse of the pound and the falling market.
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.”
Reader views (13)
I do hope the Money Laundering Regulations are applied to investigate the sources of dubious money coming in to our country in the same way they are applied to British nationals. I expect EU members don't have to worry about this sort of thing. Look at Italy !
- Michael Waugh, Kensington, 31/01/2009 15:21
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www.mutualfundstockcondo.com
- Greg Haynes, London, England, 31/01/2009 13:54
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australia put laws in place to prevent foreigners from doing this. buying is restricted to certain top end properties. Uk needs to do the same otherwise it will flow down to ordinary suburbs and locals will be priced out.
- nancy jones, sydney australia, 30/01/2009 23:59
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P. Plunkett, Dublin
I think the French prefer new builds.
The majority of British people buy old derelict
buildings and enjoy renovating them.
- Spudina, Bessude, SS, Italy, 30/01/2009 18:42
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You can't participate as enthusiastically as Britain did in the creation of global economy and then complain when it comes back to bite you. Try telling howeowners in rural France that you don't think foreign investors should be pricing locals out of the housing market, as the British (and, yes, the Irish too) did for a decade when times were good. Anyway, I think the point of this article is that prices are tumbling, so who's being priced out? The only advantage seems to be that eurozone investors are getting better value - but then I suppose you blame Johnny Foreigner for preventing you from joining the single currency too. Honestly, is there nothing the English won't moan about?
- P Plunkett, Dublin, Ireland, 30/01/2009 17:09
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Stephen, in response to your post - do you remember the past 10 years when the British looked to pour their money into the European property market (Poland, Bulgaria to name a few) pushing prices well above the reach of most of the local residents.. what goes around comes around my friend
- time lord, london, 30/01/2009 16:28
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I bet all those people who have had their property repossesed have found this news really heartwarming. Why does this government let other countries walk all over us.
- Pamela Mckay, Dagenham, Essex, United Kingdom, 30/01/2009 15:39
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Then we will rent them back to the Brits,for a price of course.
- Kev, London-UK, 30/01/2009 15:35
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Funny how Thais are allowed to buy and own property land in the UK when foreigners cannot do so in Thailand.
- Peter Noterfed, Paris, France, 30/01/2009 14:51
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I bet they will have to change the law eventually - but obviously won't bother to get round to it until half the country has been sold off to foreigners. And then they'll all go boo hoo boo hoo. It's not fair. We didn't see it coming. It's not our fault. Boo hoo boo hoo.
- Jilly, London, 30/01/2009 13:46
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Time for a change of law here, so us resident here don't have the prices pushed up by foreign investors.
- Stephen, London, 30/01/2009 13:07
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I'm suprised there's anyone left at Hamptons, they've been steadily laying off their staff in a "restructure" over the last 2 years.
- Bob, Cheam, 30/01/2009 11:52
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In other countries foreigners buying muyst only buy at the top end (not landed properties) and not apartments below 6th floor.
That way locals get lower priced homes
- J Nichols, norfolk, 30/01/2009 11:33
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