Overseas property investors are snapping up properties in the capital, with over half of all London properties on the market purchased by foreign investors in the latter half of 2018. As sterling weakened, it gave overseas buyers a beneficial exchange rate, new statistics have shown.
With the dive in the value of the pound after the Brexit vote, overseas investors have used the opportunity to purchase property in Britain and make significant savings.
International investors bought 57 per cent of the homes located in prime central London during the second half of 2018, a rate that has not been witnessed since the highest level of 58 per cent, recorded in the second half of 2012. This is according to a new study conducted by Hamptons International.
Agents have reported a steep rise in interest from investors in places such as Hong Kong for buy-to-let properties. At the time, the dollar stood at $1.29 against the pound, a drop from $1.50 the day prior to the EU Referendum, which was held on 23rd June 2016.
Investors from the EU have regained their position as the largest group of foreign buyers investing in prime central London. EU investors snapped up 19 per cent of properties in the second half of 2018, which is an increase from 10 per cent in the second half of 2017.
The proportion of property in central London purchased by investors based in the Middle East has approximately halved during the last year, dropping to 8 per cent in the second half of 2018, from 15 per cent in the second half of 2017.
Overseas investors purchased 36 per cent of property located in Greater London during the second half of 2018, which is an increase from 31 per cent during the second half of 2017. This is primarily due to a rise in the number of EU property investors in the area.
Over the past year alone, the proportion of properties purchased by investors from India has risen by 3 per cent, with buyers from Hong Kong and Russia also increasing by one per cent.
The increase in foreign investors is also due to a drop off in the number of UK buy-to-let investors, while there has been a 9 per cent increase in EU buyers year-on-year.
The weakness of the pound has made it much cheaper for many overseas investors, and seems to outweigh the uncertainty caused by Brexit. A home which would have previously cost an EU investor £1 million would effectively reduce by £124,000 in 2018 due to the depreciation of the pound.
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