More than 50% of large London properties bought by foreigners

brit1234

More than 50pc of large London properties bought by foreigners

More than a half of large London properties are being bought by foreigners for the first time, according to data from a leading estate agent.


By Harry Wallop, Consumer Affairs Editor
Published: 7:30AM BST 05 Jun 2010

Savills, one of the countries largest estate agents, said that 55 per cent of all properties in London worth more than £750,000 that it sold were bought by foreigners this year, compared with 45 per when the housing market hit its peak during 2007.

Though large houses and upmarket flats have often been bought by foreigners in London, this is the first time that an estate agent has said that more than half its clients are from overseas.

The statistics come just a week after rival firm Knight Frank said that 46 per cent of buyers of "prime property" in central London were foreign.

The falling value of the pound has been the main cause, encouraging rich foreigners to buy homes in the capital as an investment.

Experts said the number of wealthy Russians, Italians, French and Middle Eastern buyers were helping the top end of London avoid the wobble in house prices, which had affected the rest of the country. But they warned that it could distort the market, pushing up prices of large family homes at the expense of long-term residents of the capital.

According to the Land Registry, prices in London have increased by 14 per cent over the last year, considerably higher than the national average increase of 8.5 per cent. Some areas, particularly in the north east of England have seen a substantial fall.

Simon Rubinsohn, the chief economist at Royal Institution of Chartered Surveyors, said: "Are there ill effects and distortions in the market by foreign buyers snapping up high-end properties in London? There may well be in certain areas."

Wealthy foreign buyers have part of the property scene in London for decades, especially in areas such as Belgravia, Knightsbridge and Mayfair, where prices have risen so high most families cannot afford to live there. Most residents in these areas are international businessmen, many on short-term leases. Many of the properties are purely investments and remain empty.

Savills said that what was eye-catching was that international buyers, who previously had dominated the market for properties worth £2 million or more, were starting to look at less expensive homes, down to £750,000 – the price of a four-bed home in many parts of London, not just the very centre.

Jonathan Cornell, a mortgage expert at brokers First Action Finance, said: "Anything that pushes up prices to unrealistic levels has got to be a bad thing. We can't return to the prices witnessed during the bubble, when they increased by 10 per cent or even 20 per cent on an annual basis. This is not healthy for the market, or those first time buyers trying to get on the property ladder."

Yolande Barnes, head of Savills residential research, said: "The weakness of sterling, and the consequently strong purchasing power of foreign currency buyers, has undoubtedly fuelled this rise and international buyer demand remains robust.

By the end of March 2010 property prices were 10 per cent lower than their peak for sterling buyers, but in US dollar and euro terms they remained 33 per cent and 30 per cent below their peak respectively."

http://www.telegraph.co.uk/finance/economics/houseprices/7803722/More-than-50pc-of-large-London-properties-bought-by-foreigners.html

brit1234

London has been clearly seen as the main area of house price rises the last year despite low transactions. It seems that low interest rates aren't mealy bailing out buy to let and the reckless but has encouraged foriegn investors.

Hopefully with the tumoil in Europe and the increasing likelhood of higher rates here this will end.

Possibly we could have had bigger price falls a couple of months ago if it wasn't for the foriegn investors.

fc123

Saudi and Kuwait £££££ are in Brighton too. I know a seriously expensive house near me 1million + that is empty for 11 months of the year. I knew the family as they were customers.

August they come over...and then go home. Another Kuwaiti customer bought a flat for 350k in August 08 just to use for 3 weeks a year.

brit1234

fc123 wrote: »

Saudi and Kuwait £££££ are in Brighton too. I know a seriously expensive house near me 1million + that is empty for 11 months of the year. I knew the family as they were customers.

August they come over...and then go home. Another Kuwaiti customer bought a flat for 350k in August 08 just to use for 3 weeks a year.

Sucks, just when we thought we got rid of the buy to let nusance, this happens. Now I know how those people feal in Devon/Cornish villages.

Heyman_2

Yeah damn those foreign investors bringing their money to this country and injecting it into our economy. The rotters are even investing in our businesses as well.

The sooner we get Johnny Foreigner out the better!

fc123

brit1234 wrote: »

Sucks, just when we thought we got rid of the buy to let nusance, this happens. Now I know how those people feal in Devon/Cornish villages.

It's only anecdotal but I was told loads of the big Regency stuff along the seafront is Saudi/Kuwaiti owned too. They don't want it rented out whilst they aren't there so have a management company keep an eye on it of 11 months.
No idea about London but must be the same in some areas.

brit1234

Heyman wrote: »

Yeah damn those foreign investors bringing their money to this country and injecting it into our economy. The rotters are even investing in our businesses as well.

The sooner we get Johnny Foreigner out the better!

Yeap the billions spent by them in 3 weeks holiday on ice cream is crucial to our economy.




Rather than investment in our economy I think its more asset protection at our expence.

brit1234

fc123 wrote: »

It's only anecdotal but I was told loads of the big Regency stuff along the seafront is Saudi/Kuwaiti owned too. They don't want it rented out whilst they aren't there so have a management company keep an eye on it of 11 months.
No idea about London but must be the same in some areas.

I would say the same for cental London. Chelsea football club was the most famous money laundering scheme here but there are many other similar investments by overnight russian billionaires.

Heyman_2

brit1234 wrote: »

Yeap the billions spent by them in 3 weeks holiday on ice cream is crucial to our economy.

Rather than investment in our economy I think its more asset protection at our expence.

I'm going to ignore your Ice Cream point because it's very silly.

Whose expense? People who can afford a home worth £750,000+??? Is this REALLY going to affect the average FTB?

By the way, I notice the article quotes percentages rather than figures - could the figures not just be skewed by the fact that Savills probably sold a lot more properties at 2007 peak than they are selling now?

fc123

brit1234 wrote: »

I would say the same for cental London. Chelsea football club was the most famous money laundering scheme here but there are many other similar investments by overnight russian billionaires.

I heard that too......not my area of London though (where I own).....far too grim. :rotfl::rotfl::rotfl:

fc123

brit1234 wrote: »

Yeap the billions spent by them in 3 weeks holiday on ice cream is crucial to our economy.




Rather than investment in our economy I think its more asset protection at our expence.

During August they spend a crazy amount in ladieswear shops....huge spend. I reckon in Brighton, 35% of the T/O in August was from Kuwaitis. The last August I traded was 2008 though...but I now trade in W1 and I have heard it's the same....so I will let you know end August if it's true. Maybe they buy the odd house at the same time too.