The volume of investment flooding into London's residential new-build property market from overseas investors has far outpaced that from domestic buyers. Research conducted by Savills found almost two-thirds of those entering the new-build sector in the UK's capital were international purchasers, with investors from China and the Asia-Pacific region comprising the most-active group. Buyers from these nations accounted for 26 per cent of transactions in the new-build industry, showing a particular interest in apartments and properties in the lower price brackets.
Savills also highlighted the rise in the number of Middle Eastern and north African investors over the course of 2011, who have been attracted to London due to its safe haven qualities. The organisation noted buyers from these countries, as well as those from the Asia-Pacific and elsewhere in Africa, are the most likely to make a purchase for investment purposes, rather than to have a property for their own use. By contrast, North American buyers are more interested in having a home they can stay in, rather than a pure real estate investment.
There are several reasons why London's new-build property market appeals to international buyers, the firm stated, including the "absence of barriers, compared to other markets, on entering and exiting [the sector]", its "cosmopolitan appeal" and the perception that the prime real estate market in the capital is a safe and secure place for an investment. Chief executive of London Central Portfolio Naomi Heaton recently echoed this sentiment, describing London housing as a "very desirable" asset class, adding its appeal is boosted because it is "the centre [of the UK] geographically, financially and culturally".
Savills predicted London's residential real estate sector will continue to benefit from an influx of overseas investment in 2012, suggesting the "prolonged social unrest, economic uncertainty and political tension across the globe" will support its appeal among international buyers who are looking for somewhere to "safeguard their cash and provide themselves with an alternative living option".
- Tuesday 07 February 2012