Overseas Property Buyers Flood London
Recent reports have suggested a great flood of overseas property buyers in London. But what is the extent of this flood, and what are the reasons behind it?
Commercial Property
A great deal of the responsibility for these recent reports lies with what is going on in the commercial property market in central London. In fact, during a 3 month period from April to June, overseas investors bought over £2.5 billion of buildings in this area, that’s around three quarters of the overall total.
In light of these figures, it’s hardly surprising many people have referred to a “flood” of overseas property buyers. Here’s the latest from LDG, a commercial estate agents covering the London area.
Prime London Market
However, when you consider the figures for all property sales in the prime London market, the picture is very different. Here, international buyers only account for 32% of sales, with the vast majority of buildings purchased by domestic buyers.
And this market only accounts for the most expensive 8% of London sales. It is estimated that overseas investors make up an even smaller part of buyers of cheaper properties.
New Build Sector
New build properties make up only 10% of residential London sales, yet this market is more widely reported than that of used properties. As this is an area which attracts a greater percentage of overseas investors, its figures may have distorted perceptions of the number of overseas buyers overall.
So What Is the Extent of the Flood of Overseas Buyers?
Undoubtedly, there is a great amount of overseas property investors in London, but perhaps not as many as some reports suggests. This is due to higher overseas investor activity in more prominent property markets, such as commercial and new build properties.
Why Are There so Many Overseas Buyers?
There are a great number of reasons as to why overseas investors are interested in buying property in London. Here are 2 of the most important:
1. A Great Investment
Over the last few decades there has been massive growth in London. The population has exploded leading to greater competition for homes and constantly rising property prices. So for many foreign investors, London property represents a great investment.
Furthermore, with rising amounts of financial and geopolitical risk around the world over the last few years, London markets have become an increasingly attractive in comparison with other locations.
2. Multicultural City
Perhaps even more significant is London’s multicultural nature. Many of the reports on the flood of overseas buyers have focused on big investors looking to snap up property and rent it out.
However, the reality is that most overseas buyers have chosen to invest in London property because they intend to live there. In fact, only 7% of all greater London transactions involve overseas investors who buy to let out.
The Verdict
Overall, the flood of overseas property buyers in London has been exaggerated. The areas which have seen the highest number of overseas investors have been smaller, specialised sections of the overall market, such as commercial or new build properties.
And while there is still a substantial amount of international buyers, most are simply foreign nationals who have chosen to make London their home, rather than serious investors.
For more information on property investment in North West London, click here: http://addictedtoproperty.co.uk/why-north-west-london-is-the-place-to-invest/
You May Also Enjoy
Renters’ Rights Bill parliamentary progress
Housing Market Surges as Stamp Duty Changes Drive Buyer Activity
Mortgage Approvals Down in April
Build to rent completions up, but sector has seen slowdown in construction
Response to latest Nationwide House Price Index
