20% rise in European Buyers within Prime London
27 January 2009 – Following the weakening of the pound, the UK has witnessed a strong increase in overseas buyers over the last few months. Hamptons International figures indicate that in prime central London alone, there has been a 20% rise in European buyers (Q4 08 V Q4 07) and the Country market is witnessing a similar trend with a 12% increase in European and American investors registering to purchase property.
With average house price discounts across the UK now nearing 20% from the peak of 2007, the UK market currently offers great opportunities for investors who have access to funds in other major currencies.
These opportunities are magnified by the effective discount given by the relative strength of these currencies against the pound. For example, a buyer with US Dollars can find a current purchase in the UK market 39% cheaper than December 2007.
As a result, savvy international buyers are targeting prestigious UK locations such as London and the Home Counties and investing in high end property at heavily discounted rates. For example, Hamptons International figures highlight that a London property requiring the equivalent of £1million of capital in December 2007 can now be acquired for approximately £470,000 (Jan 09).
In addition, the impact of developer discounts on new-build stock has added an extra attraction for overseas buyers, with pricing down 20% in the last year (and dropped more than 30% cumulatively since the peak of the market).
"The devaluation of Sterling has, without a doubt, created an extremely favourable climate for foreign investors in the UK. We have seen a strong increase in international buyers over the last few months – particularly from Italy and France. This trend started in London and is now filtering out across the Country, particularly in high profile UK regions such as the Home Counties, the Cotswold’s, and Devon and Cornwall. The continued weakening of the pound will continue to bring a steady stream of international buyers to the UK market over the next six months," comments Rob Bruce, research manager, Hamptons International.
The comparative change in the market is illustrated in the chart below. This represents the reduction in capital required to purchase the equivalent of a £1 million property in January 09 as opposed to December 07.
