Foreign buyers are choosing luxury properties in London

Many wealthy people from other countries think that investing in real estate in London are the most stable and safe investment. According to one of the leaders in their field, real estate Agency Knight Frank, over the past twelve months buyers from other countries purchased more luxury real estate (i.e., the price of which exceeds two million pounds) than the British.

Heading the list of foreign investors, buyers from Russia, China, USA, UAE and India. Liam Bailey, head of research at Knight Frank, pointed to the fact that a stable growth of the UK property market, especially with regard to luxury homes and apartments in London, attracts many rich foreigners just because of the fact that such investments have very little risk, comparable to similar indicators in their countries. Another important role in the increased interest on the part of investors plays and the low level of the pound, allowing more profitable to invest capital in national currency of other countries, because a greater percentage of capitalalliance has the opportunity to buy luxury properties in London. Stable growth of prices for such housing, which over the past four years was 57%, with much of that increase was due to this interest from foreigners, as well as the fact that the UK is not in Euro zone, makes investing in property in London one of the most stable investments. Moreover, experts predict the further growth of prices for elite real estate, which by 2018 will be at least 26%.

Data from the Agency Knight Frank also points to the fact that the Russians are in the lead in the list of investors from other countries. Last year they made about 8.5% of all transactions for the purchase of real estate. Investors from USA, UAE and China have approximately equal percentage of transactions – 2.8% and from India – 2.6%. The share of investors from EU countries amounted to a total of 9.5%. However, statistics show that recent changes in UK legislation have significantly reduced the number of transactions in the amount of from two to three million pounds – 16%. However, the number of purchases of housing price to more than three million the new tax is almost not affected.

A similar study was conducted by the Agency Savills, construction firm Candy & Candy and Deutsche Bank. According to Global Prime Sector Report in the four largest cities of the world, including London, the cost of real estate will continue to grow, and the growth rate will reach 27% by 2017. However, the price increase will not reduce the number of such transactions, on the contrary, if it is about 300 transactions for buying property class “Prime”, then the indicated year their number will increase 400. This is due primarily to the fact that analysts predict a significant increase in so-called ultra-wealthy of the world population on 20%, its total capital will grow by as much as 30%. Also data from this study indicate that more than 70% of transactions for the purchase of elite real estate of London were committed by foreign investors. Despite some differences in the data of these two studies, the obvious is the fact that at the moment, investments in luxury properties in London are definitely profitable, stable and safe.

® Mark Saruhanov. 18.06.2013