The pound might on the up since the appointment of Rishi Sunak as Prime Minister (at the time of writing, it’s at its highest level since mid-September) but wealthy overseas buyers are still swooping in on the London property market, making the most of the vast discounts on offer at a time when the majority of the country is tightening its belt.
James Boulton-Lea, director at Strutt & Parker’s Kensington office, told Tatler the past month has been the busiest he’s had in the past year for agreed sales. ‘It’s no secret that there are US buyers active in the market, and certainly more than six months ago thanks to favourable exchange rates.’ According to Boulton-Lea, many US buyers who moved across the pond a few years ago have been encouraging their connections to follow suit. ‘I’ve been speaking to potential buyers this week doing just that now the dollar is in their favour.’
Many US buyers are after super-prime developments that offer ‘the best in lateral living and are driven by amenity and service driven products,’ says Boulton-Lea, while others have the sights on something greater.
London Central Portfolio Chief Executive Andrew Weir tells us he’s acting on behalf of several HNW American families at the moment. ‘Budgets can be up to £40 million, and they are looking for large properties within a prime postcode and with staff quarters.’
However, it’s not just US buyers taking advantage of the market, there’s also a surge of interest from the Middle East and Asia with speedy transactions on the rise. ‘We had a Singapore buyer just last week bid blind on a property – they were happy to take a chance on the photos and floorplan without having to travel with the discount from the exchange rate being incentive enough,’ Boulton Lea tells us.
The British economic outlook might be turbulent, but London still looks favourable to many overseas buyers. ‘The city remains a leading financial and economic hub in Europe,’, says Islay Robinson, founder of Enness Global London. ‘London never saw the property crash that Spain did in 2008, for example, reaffirming its resilience to economic headwinds. Add in that the UK also has one of the most developed and sophisticated mortgage lending infrastructures for non-residents in any European country, and it's easy to see why it remains so attractive to overseas buyers.’
‘Cities like Monaco and Dubai offer tax heavens but don’t have the history, education, society and culture that London offers the rich’, adds Thomas van Straubenzee, Global Head of Private Office at Knight Frank. ‘Demand stays positive in London and continues to outweigh supply.’
Of course, it’s not all so plain sailing for wealthy international buyers. While prime markers rely less heavily on borrowing, those who are turning to banks might hit a number of hurdles. ‘Currently the mortgage market is slow and costs are higher,’ says Nicolas Roux, Founder of Rive Gauche London. ‘Stamp duty is still a factor so overall the set up costs can set back the investment, plus there’s a rise in the cost of raw materials for renovations, due to supply issues and delays in importing.’
'The opportunities that exist and currency advantage still outweigh these challenges', says Roux. 'Not to mention the fact that property will always be a safe place to invest.’