- Chinese buyers no longer largest foreign-purchase group in London
- French buyers represented 11% of London’s lux deals that involved foreign buyers during first nine months of 2020, according to Knight Frank
The French led the way among foreign buyers into London’s prime central luxury housing market during the first nine months of 2020. Among the 9.2% of all home sales to foreigners in central London, buyers from France represented 11% of all high-end deals in the British capital, according to Knight Frank.
Buyers from Hong Kong and then America followed the French to prime central London residential properties.
This current buying pattern in luxury London property transactions is a major shift. In the past, foreign buyers from Hong Kong were the biggest contingent of foreign buyers in central London. Comparing the first nine months of 2019, Chinese buyers represented 15% of all foreign transaction in London. This year during the same time period, due to COVID travel interruptions and consumer patterns, Chinese buyers represented just 8.3% of all foreign transactions.
One result of this shift caused by travel restrictions due to COVID lockdowns was that UK buyers accounted for the bulk of luxury property acquisitions in 2020. UK buyers represented 59% of luxury deal making in London compared to less than half that number one year ago in the same time period.
A weakened British pound caused by property transfer tax increases in 2014 and 2016 and falling property prices due to Brexit made prime central London residential properties more attractive to foreign buyers and to UK locals alike. Euro-based buyers essentially got a discount of 30% and dollar-based buyers got a discount of some 27% compared to four years ago, according to Tom Bill, head of residential research with Knight Frank.
Another “carrot” that rendered luxury property purchases in London even more attractive is the fact that the UK intends to levy an additional 2% stamp duty on foreign buyers starting next April, 2021. This added cost has encouraged some foreign buyers to purchase in London prior to this new tax going into effect.
American agents and buyers…are you paying attention? If yes, you might be competing for prime central London properties with other interested foreign buyers from India, Italy, Switzerland and Australia.
Thanks to Knight Frank and MansionGlobal.