Laurence Glynne, partner at LDG, said: “Low interest rates could be an explanation for this sudden increase in cash buyers, as money in the bank is not earning a good return, so people are keen to invest in something they believe to be more lucrative.
“People can see the stability and growth in the West End property market and feel it is a safe place in which to invest. It has benefitted from a number of regeneration schemes over the last few years and more are in the pipeline, which has boosted property prices. Also, the planned Crossrail project will improve the commuter links in and out of the West End, making the area more appealing and driving prices up further.”
Simon Taylor, commercial property consultant at LDG, adds: “The office market in the West End is particularly buoyant at the moment. The increased interest in commercial property in the area has resulted in some new mixed-use schemes being announced, as developers try to capitalise on the demand. Planning permission for new commercial schemes in the West End stipulates that residential homes must also be provided – these newly built residential properties are driving up prices in the area as they appeal to foreign investors who are willing to buy ‘lock-up-and-leave’ properties off plan.”
In the final three months of last year, 28% of LDG’s buyers were foreign and it is particularly interesting that none of these buyers purchased with a mortgage – all 28% paid cash. This shows the confidence that international buyers and investors have in the West End property market.
Laurence Glynne says: “Historically, the London property market always outperforms the rest of the UK and the West End in particular appears to be resilient to the downward trend that has affected much of the country.
“For overseas buyers, the UK is seen as a stable country, both politically and economically, so they see property as a safe investment, particularly in prime London locations.
For the first quarter of 2011, LDG predict that the market will remain stable. Laurence concludes: “We have not yet experienced any surge in buyers ahead of the stamp duty increase on properties over £1million, which is planned for April. There are good levels of potential buyers currently looking for property in the area, but the demand outstrips supply as there is a lack of new properties coming onto the market.”
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