Prime central London property has been on the wane for years and hasn’t been helped by the UK’s ongoing uncertainty (read: shambles) over leaving the EU.
However, an unlikely knight in shining armour is emerging from the Brexit haze – Indian property buyers.
Property investment advisor London Central Portfolio (LCP) released data stating sales in central London plummeted 41% in the first quarter of this year to just 3406 sales, compared with the previous year.
LCP CEO, Naomi Heaton, blamed the fall “in large part due to significant increases in taxation” in addition to the “wait-and-see” attitude adopted by the government on Brexit.
Their data is fascinating. It shows European investors comprised 24% of all buyers of prime central London property between 2015-15, but by 2016-7 this number had been slashed to 7%.
“As the group most impacted by the outcome of the U.K.’s exit from the European Union, a bounce back amongst these investors will very much depend on the result of on-going negotiations,” Heaton said.
Matthew Riley, Head of Research at Natixis Global Asset Management, told CNBC this week that “there’s a lot of uncertainty at the moment…I would expect at some point investors to come back to property, but in the interim period the biggest move we’ve seen since Brexit has been a reduction in property allocation.”
Arguably the most interesting takeaway form LCP’s data is the emergence of Indian buyers in the prime central London market – ‘Mumbai-ers’.
Mumbai-ers now represent nearly a quarter of all purchases in prime central London, increasing from a measly 5% in 2014 to an impressive 22% today. The surge in Indian interest is driven by recent changes in Indian law that allow investors to send more capital to the UK, rising prices in domestic hotspots like New Delhi and a cheap sterling providing a hefty discount for international buyers.
“India has become a more challenging place to invest in with high loan interest rates and rising prices in the main urban centres; together with increasing global political and economic uncertainty, Indian buyers with a larger amount of capital to spend have increasingly turned to London as an investment destination of choice” said Heaton.
DealMakerz thinks high end developers and agents should heed this data.
The Far East and India now represent 58% of all prime central London property purchases, up a staggering 39% in just two years!
If you’re pitching a luxury development and struggling to find a buyer, email us and we will see if anyone in the DealMakerz network can link you up with this lucrative new buyer set.