Chinese lead the dash to buy luxury property in London

High level of overseas demand is changing the makeup of London's luxury home market

Chinese luxury home buyers are leading a group of cash rich buyers in search of upmarket London homes, with demand driven by currency exchange rates that produce discounts of up to a quarter on purchase prices, research shows.

Property agency Knight Frank said Chinese buyers benefited from a 24% purchasing power discount based on the yuan-sterling forex rate between the peak of the prime London housing market in March 2008 and October 2011. Singaporean buyers got a 22% benefit, while Malaysians received 18%.

‘The favourable exchange rate is why so many buyers from the Far East are purchasing London homes, not to live in but as rental investments,’ said Tim Wright, a partner at Knight Frank.

Between March 2008 and September this year prime central London home prices rose by 5.2%, Knight Frank said. Buyers with US dollars received a 16% discount, while those with euros received a 3.4% benefit.

Knight Frank categorises prime properties as those worth more than £2 million and about 55% of those transacted were bought by foreign buyers in the year to the end of September, from 49% a year earlier.

Overseas buyers spent about £4.3 billion on prime property across the whole of London over the last 12 months.

About 80% of buyers at London’s super luxury One Hyde Park development, in Knightsbridge near Harrods, were from overseas, according to Nick Candy, chief executive of Candy and Candy, which is development manager on the one billion pound scheme where flats cost from £7 million to £136 million.

The high level of overseas demand was changing the makeup of London’s luxury home market, said Yolande Barnes, director of residential research at property consultant Savills.

‘The billionaires have moved into Mayfair and Belgravia. The multi millionaires have moved into Chelsea and Notting Hill and the millionaires have moved into Wandsworth,’ she said.

That meant it was increasingly difficult to buy luxury homes in some areas, she said. For every 100 foreign sellers there were 158 foreign buyers, while for every 100 UK sellers there were only 70 UK buyers, Savills figures showed.


One Response to “Chinese lead the dash to buy luxury property in London”

  1. My London Home

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    Reply

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