Residential real estate prices in London have appreciated 36% since 2009 and experts are forecasting the growth will continue throughout 2012. Values increased a total of 13% last year, and Hamptons International projects an average of 4% more growth this year. International buyers are driving demand and increased prices and account for 56% of purchases in the Hamptons International index, and experts believe the purchases of prime London real estate are often an attempt to offset investment risk in a tumultuous global economy. For more on this continue reading the following article from Property Wire.
Prime central London property prices finished 13% up last year compared with 2010 and have increased by 36% since October 2009, according to the latest index covering the sector.
Prices are expected to continue to grow in 2012 by approximately 4%, according to Hamptons International’s latest Prime Central London index.
The figures are in stark contrast to the largely flat national house price growth, which is expected to finish down 2%.
Against a backdrop of strong international demand for prime London property in the first half of 2011, Hamptons International’s buyer profile index tracking the nationality of prime central London purchasers, shows that international buyers accounted for 56% of all purchases in the third quarter of 2011, down from the 73% in the previous quarters.
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Europeans bought 20%, followed by Middle Eastern buyers with 15%, Far Eastern buyers at 10% and Russians and Chinese both at 5% respectively.
The data also shows that in the third quarter more there were more British buyers in the prime sector, up 10% compared with the second quarter of the year. The number of Chinese buyers fell by 8% in the same period, while Russian and Far East buyers fell 5% and 4% respectively. The number of European Union and Middle East buyers remained roughly the same.
‘While there are seasonality fluctuations with international demand for prime Central London property, accounting for the drop in Chinese buyers over the summer period, for example, the nationality mix compared with quarter tow this year reflects a modest receding of international demand overall,’ said Adam Challis, head of research at Hamptons International.
‘This is in part due to the unusually high levels of demand from internationals in the first half of 2011, where many buyers were using prime London property as a defensive investment in a period of extreme economic uncertainty,’ he explained.
Looking ahead taxation policies which target high net worth individuals in the UK are likely to take be a consideration in the prime central London sector. ‘The global nature of many Prime London purchasers means high earner taxation policies in the UK must be compared with those on a global scale,’ said Challis.
This article was republished with permission from Property Wire.