A growing number of high net-worth individuals (HNWIs) from all over the world have London's real estate investment market in their sights. This is the finding of a new report by Cluttons, which noted that 57 per cent of the wealthy investors from outside of the UK questioned aim to purchase property in the city over the coming months. The Cluttons International Private Capital Survey 2012 revealed nearly 90 per cent of the commercial real estate deals concluded in the last year have been financed by non-domestic investors - both individuals and institutions.
Bill Siegle, senior partner at the firm, commented: "The fundamentals of the London economy remain strong, the city attracts dynamic businesses and skilled professionals from around the globe. This gravity effect underpins the city's appeal to wealthy individuals looking for investment opportunities in the next 12 months." However, not everyone is so confident about London's continued success as a global real estate investment destination. Richard Barber, partner in residential sales at WA Ellis, said that the market has yet to see the effect of the new tax regime introduced on properties that are owned by "non-natural persons" and worth more than GBP 2 million.
In March this year, investors in this category who were purchasing residential assets above this value saw their stamp duty land tax liabilities increase to 15 per cent, while the government intends to bring in an annual charge on investors with such high-value properties in the 2013 Finance Bill. Mr Barber stated that his company has seen a rise in the number of dwellings coming on to the market in London in September and he added that many companies that own real estate in the capital are considering their options in light of the "threat of new legislation".
According to the Cluttons research, though, many of the HNWIs who are looking to buy a property in London already have "strong ties to the UK". The firm suggested this could be in the form of a second home, children in education or an existing investment portfolio. In addition, Mr Siegle revealed that nearly one-third (29 per cent) of the investors polled believe that London's position as a global property market has been enhanced as a result of the problems in the eurozone.
- Thursday 04 October 2012