Overseas buyer appetite for London’s housing market is set to climb this year despite the mortgage crisis, offering a boost to prices as figures revealed the estimated value of foreign-owned homes in the capital stands at £55.2 billion.
There are 103,425 homes in the capital, including houses and flats, that are currently registered with an overseas correspondence address or to an overseas company.
The total value is based on current average prices and calculated by estate agent Benham & Reeves.
The firm said that equates to non-UK buyers accounting for 2.76% of London’s total existing housing stock (valued at just over £2 trillion).
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In the City of Westminster, foreigners own nearly 13% of all homes. In Kensington and Chelsea it is more than 10%.
Benham & Reeves submitted a Freedom of Information request to the Land Registry on properties with the title registered to an overseas correspondence address, and also looked at Government data on properties registered with an overseas company.
The research found the value of overseas-owned property in London is highest in the borough of Westminster at nearly £14.9 billion, and that represents a estimated 12.8% of total dwellings.
The study estimates that foreign homeowners are sitting on £84.2 billion worth of property across England and Wales. The total stock in those countries is valued at £7.9 trillion.
Marc von Grundherr, director of the estate agency chain, said: “Foreign home ownership levels have climbed by 3.2% in the last year alone and the vast majority of this activity is individual buyers, rather than offshore entities.”
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His firm expects a further 4% to 5% increase nationally over the coming year, with London being a big contributor. That comes as activity picks up post-pandemic “whether it be as an investment for their child’s education, for professional reasons, or to relocate completely”.
Von Grundherr said many international parties are less exposed to the impact of lenders passing on the Bank’s interest rate rises since they usually buy with cash. He said there are a number of “primarily cash buyers undeterred by increasing interest rates. Secondly, those who may be looking to borrow in order to buy still see the cost of doing so in the UK as fairly favourable compared to their own domestic markets”.
He added: “There are those who will protest over the increasing presence of foreign buyers within the London market, but it’s fair to say that they are very much delivering a well needed boost to current market sentiment and we certainly haven’t seen prices skyrocket as a result of this demand from foreign shores.”
He added that some buyers could also help provide rental homes at a time when many buy-to-let landlords look to sell up amid rising borrowing costs.
Looking at the new build sector, Amy Meyrick, head of international sales and marketing in real estate consultancy CBRE‘s residential team said: “There is a preference for developers to sell a proportion of units off-plan before construction starts, and international buyers are typically more willing to commit to this. Those who are equity-driven and cash buyers play an important role as they are less affected by the current mortgage rate environment.”
By Joanna Hodgson
Source: Evening Standard