Market Insight - April/May 2018
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Sales

Focus Economy Sales Lettings Stat of the Month

 

International buyer activity in Prime Central London highest in five years

The proportion of homes sold to international buyers in London dipped slightly to 31% in H2 2017, a 1% fall on the previous half. But this comes despite a spike in international buyers in Prime Central London (PCL) as the exclusivity of the best addresses in London and its place as one of the world’s most prestigious cities is still a big draw.


In PCL, the proportion of homes sold to international buyers rose to 55% in H2 2017, the highest level in five years. This is up 8% on H1 2017 and 16% up on H2 2016 before the EU referendum on the 23rd of June 2016. The increase was driven by a rise in the proportion of Middle Eastern buyers who bought 15% of homes in PCL, up 5% on the previous half year. Buyers from Asia have also taken advantage of sterling’s weakness, which makes it cheaper for them to buy property in the UK. The proportion of sales to Asian buyers in PCL has risen from 9% in H1 2016 to 16% in H2 2017.


However, uncertainty about the UK’s departure from the EU is adding to nerves. Even though EU buyers still make up the second largest group of buyers in PCL, they’ve been gradually withdrawing since the EU referendum. The proportion of homes bought by EU buyers has fallen from 23% in H1 2016 (pre-Brexit vote) to 10% in H1 and H2 2017. This comes despite the exchange rate moving in favour of the euro, making it even cheaper for EU buyers to buy homes.


Since January 2016 the euro has appreciated more against sterling than other currencies, giving euro buyers a further advantage. This fall in EU buyer activity suggests their reticence is more likely to be down to uncertainty surrounding Brexit.


In wider central London, the proportion of homes sold to international buyers in H2 2017 fell to its lowest level since H2 2013 to stand at 17%. Similarly, the proportion of international buyers in the suburbs and super-burbs fell 1% between H1 and H2 2017. International buyers seem to be focussing their attention on PCL in search of the most prestige property and biggest hopes for capital appreciation as the market begins to bottom out.

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