Bottom Line: Tale of two cities for foreign cash
FOR A while now it’s been clear that prime central London almost deserves its own, ringfenced place on the map.
House prices in the area – initially defined as Mayfair, Knightsbridge, Belgravia and Chelsea but often spreading further – have increased by 116 per cent in the last eight years according to recent research, massively outperforming the wider UK market.
Not only have the prices skewed the market, they’ve also made it easy to become confused about the level of overseas interest in the capital’s properties.
Yes, foreign investors want properties – both existing and new-build – in London’s exclusive postcodes.
But they’re far from dominating the overall market, with Knight Frank estimating that over the past two years 85 to 90 per cent of all new-build purchases in Greater London have actually been to UK residents.
Even in the prime locations, only 28 per cent of sales were to buyers who are non-resident in the UK.
There’s no doubt certain investors are keen to make their mark on the map of central London. But it’s wrong to talk of a foreign takeover of the market.