26 July 2017
High-end developers report increased interest, particularly, for Chinese buyers in London’s very priciest properties in flagship spots like Mayfair and Knightsbridge. Over the longer term, the high concentration of foreign buyers at London’s centre will be one important support for prices.
Moody’s, the rating agency, estimates that nearly half of London sales of more than £1 million (US$1.29 million) are to foreign nationals. Central London agents estimate the proportion in the most desirable spots – Mayfair, Belgravia, Kensington and the rest – closer to 70 per cent. Most of these buyers – 78 per cent according to a recent report – come from beyond Western Europe, a good chunk of them from Asia, the Middle East and Latin America. Few in this group ever spent much time scratching their heads over what closer European integration would bring the UK economy.
They chose – and choose – London for its safe-haven credentials: political and economic stability, the secure legal system and an easy language in which to transact. Neither these benefits, nor the appeals of London living – excellent private schools and universities and a world-leading cultural offering – are likely to be diminished by the UK’s EU exit.
The resilience of central London’s prime housing market to the wobbles of the UK economy was demonstrated during the Eurozone crisis. Mayfair provides a good example. This prized central London spot has long been a favourite investment choice for the richest Asian and Middle Eastern buyers, who have helped the neighbourhood to a price premium of nearly a fifth over prime central London’s average.
Between March 2009 and the end of 2012 – a period spanning the end of the UK’s recession, the worst of the Eurozone crisis and an unprecedented UK government austerity programme - Mayfair prices gained 61 per cent. If foreign buyers were worried what the health of the UK economy would do to Mayfair apartment prices, they certainly weren’t showing it.