London prices rise as record number of nationalities buy luxury property

The number of nationalities buying property in London has hit a new record, with 61 buying in the 12 months to the end of February this year. The fastest growing nationalities in terms of market share are buyers from Spain and Uzbekistan.

Liam Bailey, head of Knight Frank Residential Research, comments: “Prices slipped in London during the summer and autumn last year, which fitted the wider narrative of a weakening UK economy and a weaker national housing market. 

“Since then prices have resumed their recovery, and in the four months to the end of February they rose by 4%. The reasons for this growth, and the divergence of this market from national trends, can be partially ascribed to low stock volumes, and a desire from buyers over recent months to buy and fix their borrowing costs at very low rates. 

“However, the most important factor driving price growth, has been growing demand for London property from international buyers. Over the last 12 months the proportion of £2m+ sales which have gone to non-UK buyers hit 52%. Above £5m the figure was 64%.

“The number of different nationalities who are buying in London has also risen, from 46 in 2009 to a new record of 61 over the past year. 

“The nationalities which have seen the fastest growth in sales volumes have been Spanish buyers (up by 340% in the year to February 2011), followed by buyers from Uzbekistan.
 
“Looking at our top 15 fastest growing nationalities by market share, we can see several trends at play. Eurozone concerns appear to have pushed buyers from Spain, Greece and France into 1st, 5th and 12th place respectively.
 
“Wealth generation from the mining and commodity sectors has propelled demand from Uzbekistan, Australia, Nigeria and Russia. Asian economic growth has fuelled demand from Hong Kong, Malaysia, Taiwan, China and India.
 
“Looking ahead at how these trends will change over time, London’s leading wealth managers and private bankers recently confirmed, in our Super-Prime London Survey, that the 10 nationalities most likely to grow their share of purchases in the central London market over the next 12 months were: 1 Russian, 2 Chinese, 3 Indian, 4 UAE, 5 Other Middle East, 6 Egyptian, 7 Italian, 8 Lebanese, 9 Turkish and 10 Brazilian.”

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