International investment into luxury London property reached new heights in 2011 say various luxury property reports across the industry. According to Savills, international buyers made up 63% of sales and generated a net £1.4 billion inflow of equity in the new build sector. These buyers hailed largely from Hong Kong, China, Singapore and Malaysia.
In terms of prime new build London properties, international buyers were responsible for 88% of sales with Russians and investors from other European countries dominating the market. Savills reported that buyers from Eastern Europe and the Commonwealth of independent States (47%), and the Middle East and Africa (24%) made up almost three-quarters of sales.
Buyer’s agent Home Hunts has also become aware of a rise in Russian investment in its luxury London property offerings throughout 2011. “There has been a wave of investment from Russia, while areas such as the French Riviera and Saint-Tropez are still popular with Russian buyers in Europe, we have noticed a gradual increase in investment in prime London properties over the last twelve months,” said Tim Swannie, the director of Home Hunts. “The most popular areas for luxury investment property in London from Russian buyers have been Kensington, Knightsbridge, Belgravia, Chelsea and Mayfair”
The political unrest in Russia ahead of March’s elections is cited as the main reason for increased Russian investment in luxury property for sale in London. Uncertainty surrounding potential political reforms means that the wealthy are choosing to purchase prime London properties as it is considered a stable investment prospect.
“Prime London property is one of the best options for investment in our current climate,” said Tim. “People looking for safe investment properties are choosing London – as well as Paris, actually, mainly in the 7th, 8th, 16th and 17th arrondissements – as it offers security that investors, and, currently, Russians in particular, cannot find on home territory at the
However, British buyers are also showing that when it comes to asset investment they have confidence in their own market. According to a report from Hamptons International, UK buyers investing in prime London properties peaked in the third quarter of 2011 at 44% of all purchases. But the biggest jump was from the Russians in the last quarter of the year whose purchases increased by over 10% compared with the previous quarter.
When taking the whole of the luxury London property market into consideration, British buyers are accounting for just over 40% of sales, says the report from Hamptons, with Russian buyers accounting for 38% of transactions overall.
Adam Challis, the head of research at Hamptons International, said: “The results of our nationality tracker are a fascinating insight into the confidence levels of international buyers. As different regions around the world experience times of economic or political uncertainty, prime London residential property has offered more than just a safe bet – prices grew on average by 13% last year alone.”