In Mayfair, Knightsbridge and Hampstead overseas buyers account for more than 60% of all prime market purchases. The number of different nationalities buying in central London has grown from 30 in mid 2008, 48 in mid 2009 to 51 by mid 2010.
International demand has helped to drive prices higher by 24% in the 15 months since March 2009, prices are only 6% below their March 2008 market peak.
Liam Bailey, at Knight Frank, said:
“Prime central London house prices rose by 0.9% in June, meaning prices now stand 20% higher than a year ago. The recovery in prices has been driven in large part by the strength of demand from international buyers.
“The range of buyers has risen dramatically over the past year as the weak pound created opportunities for overseas purchasers to enter the market with significant discounts on peak 2008 pricing.
“Despite the fact that prices have risen 24% since last March, and stand only 6% below their March 2008 market peak, the weakness of the pound ensures that effective discounts available to foreign buyers are still very significant. Chinese buyers are still able to secure a 31% discount on 2008 prices. Buyers from Hong Kong, the US, Saudi Arabia, Singapore and Malaysia are all able to secure discounts of around 28%.
“Between December 2008 and March 2009 international buyers’ share of the £5m+ London market soared from 39% to 48%. By June this year it had hit 68%.
“Central London is now a market apart, not only is demand seemingly immune from wealth attacks, but so too is supply. The proportion of un-mortgaged owners in central London is 59%, compared to 41% for the UK. Central London is dominated by discretionary owners, they can sell when they choose to, meaning that when prices fall so too does supply.”
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