Residential and commercial property experts have analysed the latest data and found that Chinese and Middle East investors are the dominant buyers in London’s super-prime property market at the moment.
Super-prime Locations In London
The term super-prime refers to property purchase prices that are in excess of £10 million.
Super-prime investors tend to purchase properties in London’s most extravagant areas, Kensington and Mayfair, although other highly sought-after locations include Belgravia, Knightsbridge, Notting Hill, Chelsea and St John’s Wood.
Why Is London Attractive To Foreign Investors?
Economic and political situations in regions such as China, Russia and the Persian Gulf are volatile. Fluctuating commodity prices in these global regions mean that the super-rich require somewhere to safely invest their wealth.
As these countries don’t usually represent stability, the wealthy are choosing to invest in safe havens abroad instead of trusting in their own national economies. Middle East investors in particular like to diversify their property portfolios by investing into several different countries. The UK is an attractive prospect in addition to the real estate markets in USA and Germany.
Whilst no property market is entirely safe, those such as the UK that are strongly backed by foreign investors represent a safe bet. Although conversely if those investors from overseas do decide to pull out, then the risk is that the market would collapse entirely. However, the forecast for London’s future looks good. Some property experts predict that average London purchase prices will increase a massive 54% by 2020. House builders are trading on all-time high valuations and property schemes are welcoming brand new construction opportunities in the capital.
Infrastructure Changes Boost Property Prices
London is a city whose landscape shifts constantly. The recent construction work on the new Crossrail route has boosted property prices in new areas of the capital. The line which will be known as the Elizabeth Line is due to open in stages, from May 2017 to December 2019, and has already had a positive effect on property areas such as Paddington and Notting Hill which are located along parts of its route.
Retail Investment Expansion
Crossrail is also helping to expand London’s geographic reach for investors. Letting agents in Essex have reported an increase in enquiries about buy-to-let investments in Brentwood and Romford, which are both be benefiting from the Crossrail expansion.
Predictions For London’s Housing Market
Whilst George Osborne’s high-end changes to stamp duty might be off-putting to some, the fact remains that our interest rates are at an all-time low. Even though the base rate is likely to be minimally raised later this year or into the first quarter of next year, mortgage rates are incredibly favourable in the UK at present.
Expats who wish to invest their wealth in London’s stable property market needn’t worry about their eligibility to purchase in the capital. The high prices in the city will require increased borrowing for many buyers, but large mortgages are an option to utilise in order to secure your London investment property. Take a leaf out of the book of Chinese investors and trust in London’s housing market in 2016!