US tech giants prompt London property surge

At a time when Brexit is again centre stage, you may have missed the fact that US investment in London property is reaching record levels. Figures for central London hotspots such as Marylebone, Mayfair and Chelsea show that investment by US tech giants in London has prompted massive investment in luxury London property. This comes despite various financial headlines again talking down the prospects for the UK economy.

US tech giants moving to London

In recent times we have seen massive investment by tech giants seemingly going against the grain of leaving the UK as a consequence of Brexit. This investment includes:-

• Google’s £1 billion European headquarters
• Facebook’s engineering hub
• Amazon’s UK headquarters

It would appear that a relaxation of US tax laws governing repatriations of money held offshore has seen funds released for investment overseas by US tech giants. While some questioned the U.K.’s long-term relationship with the US, especially with the Pres Donald Trump at the helm, actions seem to very much speak louder than words.

Leading overseas property investment

Historically US investment in London prime property has been less than 3% of the total foreign investment. The US has constantly ranked outside the top five foreign investors in London for many years. However, recent figures show that US investment has made up 6% of all foreign purchases in central London so far in 2019. This puts US investment second in the overseas investment list behind China.

When it comes to the average investment per central London property the US is fifth with an average of £7.3 million. Saudi Arabia leads the way on £13.4 million, Turkey £10.8 million, Germany £9.6 million and Russia at £9.1 million. Sceptics will point out the reduced value of sterling against the dollar and the euro since the Brexit referendum. While this is certainly a valid point, and has made UK property up to 20% cheaper, there is more to this recent trend.

The UK has global appeal

A recent survey also highlighted the fact that the UK has attracted more overseas investment than France and Germany in recent times. This trend would certainly seem to support the growing investment by tech giants such as Google, Facebook and Amazon. At a time when the UK is being painted as a pariah in international markets, by those looking to remain in the EU, it would appear that global investors and global businesses think otherwise. Could the UK become the next major global tech hub?

While the UK government has been under significant pressure for unhelpful tax changes regarding property investment, investment in tech has not suffered to anywhere near the same extent. Indeed, the UK authorities have been very welcoming of global tech companies, creating an environment in which they can prosper with tax benefits. As a consequence, it would appear that US investors in prime property are extremely positive about the UK in the short, medium and long term.

Welcome news!

The UK property market has not had an awful lot to shout about in recent times due to Brexit uncertainty. However, with US tech giants ploughing record amounts of investment into London (and the rest of the UK) perhaps times are a changing?

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