The share of foreign investors in the real estate market in Central London is decreasing

British buyers began to push buyers from other countries in the property market of London. In the third quarter of 2015 79% of transactions in the property market of London was signed by citizens of the United Kingdom. The activity of local buyers is gradually erasing the gap that had developed in previous years, when the main buyers of real estate in Central London were foreign investors.

To reduce the inflow of foreign assets was the result of the very strong pound and too high in the scale of Stamp duty, which is particularly noticeable for the super-expensive real estate.

Local buyers support banks low rate mortgage. The number of buyers who bought property in mortgages in the third quarter of 2015 increased compared to the second quarter from 53% to 65%.

The share of foreign buyers dropped to 32% in the third quarter of 2015 with 34% in the second quarter and 37% in the third quarter of 2014.

The share of investment in the sector of luxury housing in Central London has decreased from 42% in the second quarter of 2015 to 35% in the third quarter.

Despite the increase in Stamp duty, for the first three quarters of 2015 began to increase the total pressure in the market from buyers. If in the 4th quarter of 2014, there were 10 buyers for one property in London, then in the second quarter for 12 buyers accounted for one object, and in the third quarter of 2015 – 14 buyers for each property. All this is happening against the background of reducing the number of new facilities entering the market.

For the first time in many years on the London real estate market began to increase the share of local buyers. They adapted quicker to the new changes of taxation and starting in March 2015, prices for luxury properties in Central London not only stopped its decline, which took place from the 4th quarter of 2014, but demonstrate a slow growth in the third quarter of 2015 was 0.3%. It is expected that in 2016 the luxury real estate prices in Central London will continue to grow.

Starting in 2013, property prices across London rose by 12.6%, equivalent to £131000 in absolute terms. This has significantly reduced the gap between property prices in Central London prices to the rest of London. Really, the price difference has decreased from 98% two years ago to 74% now. This circumstance gives a chance to some wealthy Londoners to make a choice in favor of the prestige of the centre , paying a decent premium.

The most popular are one-bedroom apartments, which are popular among first-time buyers afford housing, and investors “buy to let” . Prices in the housing sector rose by 3.9% in the third quarter of 2015.

However, do not expect a sharp rise in property prices in the Central districts of London, as now, the market is a trend of redistribution of prices of other areas of London that will set the tone in 2015.

® Alice Morgan. 19.11.2015 g