The first few months of this year are likely to be the best time for buyers in central London before those with big bonuses, according to consultants, snap up the best properties.
There has been a flurry of activity during the first two weeks of January, as buyers who started to look at the end of last year return to the market, keen to secure a home before cash-rich bankers are in a position to proceed with purchases, says a report from real estate consultants Cluttons.
Values of quality property in prime Central London continue to perform well, ensuring it remains an attractive, relatively low-risk investment during the downturn, the report points out.
‘It looks like big bonuses will be paid this year despite the Government’s attempts to intervene in the case of the state owned banks. Bankers are already starting to look for property ahead of their bonuses being paid, and buyers know it will only be a few weeks before this cash starts flooding into the market, creating fiercer competition and forcing sales to sealed bids,’ said James Hyman, partner for residential sales at Cluttons.
‘The first quarter of this year will offer the best window of opportunity for sellers, as buyers spending upwards of £1million will be keen to avoid the additional 1% rise in stamp duty tax coming into force in April, which will take their stamp duty bill to 5%. The limited amount of property for sale also presents excellent opportunities for sellers over the next few months,’ he added.
The bankers though will face tough competition from overseas buyers who regard property as being very cheap in London at present. Chinese, Russians and even Americans are increasingly buying in the British capital.
There has also been a surge in the number of Indians looking to buy. Indians are now among the top ten buyers in London, according to research from Knight Frank. Asians make up 49% of all investors in London’s residential property market.
Russians have traditionally been some of the highest international buyers and are still buying up most of the exclusive properties in London.
‘There has been a distinct shift in the kind of Indians buying properties in Central London. While it was the Indian tycoon who was buying in this area before, now many upper middle class Indians have also started investing here,’ said Jaideep Singh, head of the India Desk at Knight Frank’s London office.
Russians are the biggest spenders, looking for properties between £20 to 30 million while Indians spend around £1 to 3 million and most are from Delhi and Mumbai.