London property prices buoyed by overseas demand London property prices are continuing to appreciate, on the back of growing demand, particularly from overseas, according to various reports. The latest report from international estate agents Savills shows that investors from India have replaced the Chinese as the largest group of overseas buyers purchasing property for sale in London.
Asia’s expanding economies, growing middle class and favourable foreign exchange rates, has made London a magnet for Asian investors, particularly those from India. “There are more buyers coming from India and Pakistan than China - and they're spending more,” the report stated. “This group is now the most important to the London market among the emerging economies.” Savills estimates that a total of £16.5 billion will have been invested in London by overseas property investors during the five-year period to 2011. Yolande Barnes, head of Savills research, said: “We think that the already established preference of buyers from the Asian subcontinent for London will mean that Indians will be among the most important buyers from the emerging countries in the future.”
In 2010, Indians bought residential property worth £290 million in some of London’s most affluent areas, pushing up demand for property for sale in Notting Hill and property for sale in Holland Park, among other parts of Prime London. The report says that there is specifically high demand for properties in Mayfair, Belgravia, South Kensington and Chelsea, as well as properties in Holland Park, Regent's Park and St John's Wood.
Historically, property price rises in some of London’s most prestigious areas have often rippled out to secondary areas, ensuring greater demand for property for sale in Bayswater, for example, among other highly regarded locations.
Foreign purchasers from other parts of the world, including the USA and Europe, are also helping to fuel greater demand for homes in prime London areas. Overseas purchasers are benefiting from price reductions due to the poor state of the British sterling – 17% for US dollar buyers and 16% for Euro buyers on 2007 pre-crash prices. Ed Mead, director of sales at Douglas & Gordon estate agents, comments: “There continues to be a strong appetite from well heeled international and city types looking to buy property in London and despite stock levels increasing, demand still outstrips supply so it looks as if prices will continue to rise.
“Although property values in the capital are increasing, there is still a discrepancy between actual values and some rather over inflated asking prices.” The latest Knight Frank study shows that the average price of a home in Prime London appreciated by 1.4% in May 2011, contributing to annual growth of 8.3%. Prices have now increased by 33% since their recent post-credit crunch low in March 2009. Liam Bailey, head of Knight Frank Residential Research, said: “Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009.” Overseas nationals are also looking to buy property in Maida Vale, West London, and its surrounding areas, according to Marsh & Parsons estate agents. The company recently opened an office in Little Venice to specifically cater for growing demand for property in Maida Vale and Little Venice. Peter Rollings, Managing Director of Marsh & Parsons, recently commented: "Maida Vale’s property market is extremely popular. The area is proving hugely attractive to both overseas buyers looking for easy access to the City and the local international schools and UK buyers wanting to move into such a great location.”
Source: Marsh & Parsons – Property for Sale in Maida Vale & Mayfair