London real-estate continues to attract international buyers

London real-estate prices have fallen recently, but demand from international buyers hasn't as lower prices and a weak sterling is a double discount.

London real-estate continues to attract international buyers

It’s no secret the London real-estate market has long been popular with international buyers. However, with prices for residential property falling in the capital, does it still hold the same allure? The answer, for many, is a resounding yes.

While recent UK house prices indices – of which there are numerous – continue to collectively identify London as the reason behind the weaker pace of house price growth, many international buyers are flocking to make a purchase.

Why? For that very reason – prices in the capital have fallen. And, according to London property experts Savills, they aren’t expected to rise for another couple of years, either. Add in the still weak level of sterling and buying a luxury London property in a prime area, has become quite an attractive investment.

Indeed, analysis of Land Registry data by boutique property management firm, London Central Portfolio, shows international buyers represented some 45% of all prime central London property buyers so far in 2017. In addition, sales of properties in the most exclusive post codes, have risen by over 4% in the second quarter of the year.

When looking at London properties that are valued at less than £1 million, however, a different trend is emerging. These are the kinds of properties typically sought after by UK buy-to-let investors. Purchases of them by this group, have fallen by a third.

The reason for that is a little more complex. But, the leading one is more reflective of government policies making it more expensive for some BTL landlords to buy and manage their property portfolios. There are also some fears that Brexit could significantly subdue demand for rental properties in the capital. A least at current rental prices.

However, keeping our eyes on the exclusive London property market, the lower level of prices and still weak sterling is essentially giving international buyers a double discount and giving the property market - in those post codes at least – significant support.

How long the increase in sales, and price in some areas, will last is of course, a big unknown. But for now, international property purchases are providing a welcome boost to the London residential real-estate market. 

As of 11:42 BST, Wednesday, 20 September, GBP/USD share price is 1.3117.

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