Foreign investors have snapped up between 65-70% of the new build homes in prime London over the past two years, research by property consultancy Chesterton Humberts has revealed.
According to Humberts, the international appetite for London property has allowed the new build sector to remain buoyant, as average new build residential prices in the capital rose by 56.3% between 2009’s quarter 1 2009 and 2013’s quarter 2.
In addition to Chinese, Russian and Middle Eastern lifestyle buyers that have previously driven the market, Humberts has noticed an increase in buyers from these countries looking primarily for investment purposes.
It has also identified a number of new nationalities that are becoming more active in the London property market, including Nigerians, French and Greeks, due to political strife, economic difficulties and tax threats to personal wealth.
Humberts says that London’s established safe haven status, combined with its legal transparency and the good long term performance of its property market, means that it features on many international buyers’ wish lists.
Humberts’ head of international residential developments, Samuel Warren, highlighted that there was £2.2 billion of investment in luxury new build homes last year and expects this figure will be exceeded this year.
“With demand for prime new build properties set to remain robust and new supply struggling to keep up, we expect investment volumes will be higher this year than last. The relative weakness of sterling means that many overseas buyers can achieve effective discounts on purchase price whilst acquiring an asset that will almost certainly appreciate considerably over time and which they will have little difficulty in selling when the time comes.”