The Inside Edge
London has and always will be a very attractive location for investment, with figures released recently showing that overseas buyers are still very enthusiastic about buying property in the capital. Research by Knight Frank shows that in 2012, £2.2 billion worth of property was bought in London by buyers from overseas.
Overseas interest in London property is certainly nothing new; the UK capital offers some of the most sought-after locations in the entire world, but it may come as a surprise to some that the practice is still so popular in the current economic climate.
It appears as though there have been many buyers in countries where economic performance has bucked the trend and remained stable. The research shows that people from 52 countries all over the world bought property in London in 2012. The biggest share was surprisingly from Singapore, which accounted for 22% of the sales. It’s important to note that these percentages are ranked in terms of the number of transactions, not their value. Buyers from Hong Kong also proved to be great in number, accounting for 16% of sales. There were also considerable purchases from buyers in Russia, China and Malaysia.
Insecurities in the Eurozone have actually been of a slight benefit to the London property market, as some European investors have chosen to diversify by buying property not directly tied to the euro. The pound being relatively weak has also helped foreign investors buy property here in the United Kingdom.
It’s not just financial security and investment which is attracting overseas buyers either. Aside from the fact that London is consistently ranked as one of the most important cities in the world, the education opportunities are second-to-none. This makes the capital one of the best destinations to send aspiring children and students. London’s multicultural credentials also help it to be accommodating to nearly any nationality.
Aside from house purchases, the rental market from overseas is also very strong. Again, this is linked to the education prospects. While there may have been 52 different nationalities that bought property in London, there were in fact 77 that rented last year. Indeed, the number of foreign nationals living in the capital is extremely high; there are more Europeans living in London than the entire population of Frankfurt. There are also more French Londoners than there are French people in the city of Cannes. This is why French schools have cropped up in some of the more affluent areas.
While those in the UK might still be struggling to finance a home purchase or sell their home, with many looking for a quick house sale in order to get what they want, it appears as though overseas buyers are contributing to the slight improvements we’re currently seeing in the market. There are still a variety of incentives around for first time buyers, but more still needs to happen for UK nationals to start buying in force again, especially with the price of housing in London.