A new report from Knight Frank reveals that there are fewer foreign property buyers in London’s prime property market than once believed. The survey reviewed purchasers of properties valued at £1 million or more for the year ending in June and found that only 28% were not residents of the United Kingdom (UK). The disparity resulted from a previous focus on the purchasers’ nationality as opposed to their residence status. Of those who are foreign, the majority come from across Europe, the Middle East and Russia. For more on this continue reading the following article from Property Wire.
There has been a lot of talk about the huge number of overseas buyers in London, especially in the new build prime property market, but a new detailed analysis shows that only a small proportion do not live in the UK.
Of all £1 million plus prime central London new build sales in the 12 months to June 2013, just 28% were to buyers not resident in the UK, according to an analysis report from Knight Frank.
While most analysis to date has concentrated on the nationality of purchasers, this research focuses on a buyer’s residence. In a city as diverse and globally connected as London, where, for example, 38% of inner London residents were classified as foreign born in the 2011 census, this is perhaps more accurate when assessing foreign demand, the firm said.
The research reveals that over the 12 months to June 2013 49% of all £1 million plus sales in prime central London went to foreign buyers by nationality and the 28% who were not resident in the UK were mostly investors looking to earn an income by letting their properties to Londoners.
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To understand the scale of international purchases across Greater London Knight Frank’s research team assessed a sample of 3,500 property titles for new build property purchased in the 24 months to June 2013. This involved developments in all 33 Greater London boroughs, with sales prices ranging from £200,000 to £5 million.
Residence of ownership was based on the proprietor record in each title from the Land Registry. Where there were companies or trusts the researchers took a view that with the exception of registered social landlords, or other obviously UK based entities, these records represented international purchasers.
The research found that 51% of new build purchases in the relatively small prime central London market were to UK residents over the past two years. Across the remainder of inner London the portion rises to 80%. In outer London, that is the remaining 19 boroughs, more than 93% of sales were to UK residents.
Overall the most number of foreign buyers come from Europe, the Middle East and Russia, the research also shows.
‘Our estimate is that over the past two years 85% to 90% of all new build purchases in Greater London have been to UK residents,’ said Liam Bailey, global head of residential research.
‘When we considered the two year period covered by our sample of new build sales records there was no indication of a shift towards higher non resident purchases over that period. While some developers have noted rising interest from overseas buyers in areas outside central London, these appear to be localized examples,’ explained Bailey.
‘Our research points to the fact that the majority of demand for new build property in London from overseas remains focused on the relatively small and concentrated market made up of the central London postcodes,’ he added.
This article was republished with permission from Property Wire.