More buyers from India enter the prime central London property market
According to a new research, Indian buyers have become the second largest group of purchasers in the prime central London property market, accounting for 22% of sales. The number of sales to this group has increased from just 5% two years ago before rules were relaxed around the amount of capital which Indian buyers could remove from the country, according to an analysis from London Central Portfolio.
In terms of value, Indian buyers represented a third of the total spend and their average purchase price of £1.77 million is slightly higher than the market average of £1.6 million, it also shows.
In contrast, buyers from continental Europe have fallen significantly due to increased uncertainty following the UK’s Brexit vote, from 24% two years ago to 7% over the last 12 months.
South East Asian buyers took top spot as the largest buying population, representing 36% of all purchases.
Details from the report show that the increased interest from Indian property investors has not only come from private individuals but has also been reflected in a move from institutions and developers from the subcontinent who have been buying up large tracts of the capital.
‘Despite two years of slower price growth due to tax headwinds and the UK’s Brexit vote, Prime Central London has remained attractive to international buyers as a safe haven asset class with the rule of law and proper title to property,’ said Naomi Heaton, chief executive officer of London Central Portfolio.
‘As India has become a more challenging place to invest in with high loan interest rates and rising prices in the main urban centres, together with increasing global political and economic uncertainty, Indian buyers with a larger amount of capital to spend have increasingly turned to London as an investment destination of choice,’ she explained.
‘As sterling has weakened against foreign currencies, representing a 20% discount for US$ denominated investors compared with two years ago, we are now seeing Indian buyers becoming an increasingly dominant force in the marketplace. They have overtaken buyers from the Middle East who have fallen to third place,’ she added.
The increase in Indian buyers, however, has been set against a significantly decreasing number of European investors following the decision to leave the European Union. Representing the second largest nationality two years ago, buyers from continental Europe have plummeted with their share of the market falling by over two thirds.
Heaton pointed out that because of Brexit buyers from Europe have been adopting a wait and see stance. ‘As the group most impacted by the outcome of the UK’s exit from the European Union, a bounce back amongst these investors will very much depend on the result of on-going negotiations,’ Heaton added.