Overseas interest in London prime postcode luxury homes continue to grow

Overseas interest in London prime postcode luxury homes continue to grow

27 Jun 2019

London new homes

The reports by Halifax claim the house price in the UK is growing at a fast pace since the start of 2017 during the three months to May end, even though, the last year growth was slow. Halifax said the prices were 5.2 percent higher in comparison to 2018. The imposition of higher purchase taxes on homes worth over $1.7 million and on the second home created a temporary depression. As per the new rules from 6th April 2019, the investment made by non-residents in the market will oblige the property buyers to pay the UK Corporation Tax, which even applies to the indirect disposal of UK real estate.

The housing markets indicate development in the broader economy and the current instability in the political arena created perplexity, on the contrary, a number of the first-time buyers continue to grow where in the 12 months to March 2019 the number of such buyers increased to 359,000(as per Nationwide survey). Despite falling growth, the number of transactions and mortgage approved remained stable.

Halifax house price data suggests a stronger demand where annual growth in price was 0.6 percent in April. House owners are earning through annual gains in price, rents and the decline in the mortgage rate. These factors have been supporting both residentials and commercial market real estate markets in the country. In the commercial sector, recently, technology firm Edge bought the £50m office development site and there are a number of US super-rich who are buying in the UK and overseas investors.

The US investors buying London mansions

Hedge fund billionaire Ken Griffin said this is one of the best time to invest in UK mansions, and London is one of the best districts for Americans to buy where the investment doubled in the year as compared to 2018(as per Knight Frank). The US buyers are second to Chinese, in purchasing in the prime postcodes of London as the decline in the pound is supporting prices, at the time when the sales tax has been increased by the government. A report by the CIT Group Partners LLP claims the 30 percent of the units of their luxury homes and apartment were bought by American buyers where the project’s start price is 2.9 million pounds and overseas investors.

London continues to be one of the most expensive cities for real estate investors, but it dropped four places from 19th to 23rd in the last year, mainly, due to weakening pound against the US dollar. It continues to be one of the key destinations for investors who wanted to relocate to international business and financial centres. London is a wealth centre as per Knight Frank and the recent appeal for investment in the city was not influenced by Brexit.  There has been an increase in the number of overseas migrants coming to the capital city. The official data suggest the house price inflation was up to 1.4 percent in the 12 months to March and it is expected to remain stable in the coming year.

To know more about UK properties, click Hamilton International Estates (www.hamiltoninternationalestates.com).

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