Despite the on-going global financial crisis and continued concerns over the euro, Central London's residential market continued to recover very strongly throughout 2011.London's reputation as a safe haven for investors is being reinforced by global troubles, not undermined. Additional incentives such as a weak sterling and a favourable tax system are also making it more attractive amongst a range of potential foreign investors.
"Property prices in central London have increased ten percent over the last two years on the back of a shortage of property in the best addresses. Prices in the capital are set to increase four percent this year, five percent in 2013 and peak at eight percent in 2014" said Jones Lang LaSalle who reported that the firm had sold $2 billion worth of London new build residential property to foreign buyers in 2011, with regional investors accounting for about nine per cent, up from five per cent in 2010.
Commenting on the report, Ben Stroud, Associate Director of Residential Agency, Development & Investment at Jones Lang LaSalle London said: “Middle Eastern investors have strong historic links to the London property market and have typically invested for the longer term. We are definitely seeing increased interest both in terms of volume as well as the variety of locations that regional investors are interested in.
"London continues to offer solid growth potential and its twinned status as an accessible capital city and financial centre, alongside a stable political system and transparent legal framework, continues to attract interest from across the Middle East."
Central London Housing Market
Tuesday, 21 February 2012
Thursday, 2 February 2012
Russian Investment in London Prime Property Increases as Presidential Vote Nears
Bloomberg reports that Russian investors increased their share of luxury-home purchases in London’s most expensive neighborhoods more than any other group in the fourth quarter, Hamptons International said, as Vladimir Putin bids to regain the presidency in March amid growing opposition.
Russians accounted for 16 percent of all transactions in the Chelsea, Kensington, Knightsbridge and Belgravia neighborhoods handled by the London-based broker, according to a report today. That was up from 5 percent in the previous three months and 1 point more the combined total for European Union countries.
“It’s a precaution against things going too far in the wrong direction,” Adam Challis, head of residential research, said by phone. “The very well-connected folk realized that there was going to be some serious political uncertainty and that they’re better off putting their money into London property.”
Russian Prime Minister Putin faces the biggest challenge to his rule since coming to power 12 years ago after allegations of fraud in Dec. 4 legislative polls sparked mass protests. Putin’s voter support has fallen to 37 percent, according to an opinion poll by the independent Levada Center, indicating he will need to face one of the four opposition candidates in a second-round run-off.
Russians accounted for 16 percent of all transactions in the Chelsea, Kensington, Knightsbridge and Belgravia neighborhoods handled by the London-based broker, according to a report today. That was up from 5 percent in the previous three months and 1 point more the combined total for European Union countries.
“It’s a precaution against things going too far in the wrong direction,” Adam Challis, head of residential research, said by phone. “The very well-connected folk realized that there was going to be some serious political uncertainty and that they’re better off putting their money into London property.”
Russian Prime Minister Putin faces the biggest challenge to his rule since coming to power 12 years ago after allegations of fraud in Dec. 4 legislative polls sparked mass protests. Putin’s voter support has fallen to 37 percent, according to an opinion poll by the independent Levada Center, indicating he will need to face one of the four opposition candidates in a second-round run-off.
Monday, 23 January 2012
Estate Agents Remain Secretive About Fees
Estate agents are often secretive about what they charge sellers, it has been alleged, whilst there is great variation in the levels of fees that they charge.
A new survey found that only one agent in London – Winkworth – disclosed its fees on its website. About 20% of London agents refused to disclose their fees over the phone or via email.
The survey, by new estate agent comparison website ipostcode, looked at 250 agents’ fees across London and found that it is not necessarily in the most expensive postcodes where agents charge the highest fees.
Some of the highest average commissions are charged in the SE1 (Bermondsey), NW11 (Golders Green) and W6 (Hammersmith) postcodes, although agents in some lower priced areas – E8 (Dalston), N8 (Crouch End) and SE28 (Thamesmead) – offer some of the lowest commission rates.
The majority of the London estate agencies surveyed quoted 1.5% commission, but 15% of agents quoted 1%. The highest commission level quoted was 2.5%.
There were several postcode areas including Islington (N1) and Clerkenwell (EC1) where commission levels spanned the range from 1%-2.5%, which means that on a property priced at the London average of £342,749 (according to latest Land Registry figures), the seller could be paying anything from £4,113 to £10,282 including VAT to sell the same home.
Estate agents’ reputation for being guarded about their fees was borne out by the survey, with one in five of agents refusing to say what their fees were, either on the phone or via email. Only one agency, Winkworth, which has 43 London offices, displayed fees online.
One in four agents said that their fees are negotiable based on either a realistic valuation of the property or depending on the price range of the property. Many agents in the survey stressed that an agency should not be chosen simply on their commission rates but on service, track record and marketing.
The survey also found that estate agent fees in London at an average of 1.7% are more or less in line with the national average of 1.8% – contrary to the perception that London estate agent fees are the highest in the country.
Estate Agent Today
A new survey found that only one agent in London – Winkworth – disclosed its fees on its website. About 20% of London agents refused to disclose their fees over the phone or via email.
The survey, by new estate agent comparison website ipostcode, looked at 250 agents’ fees across London and found that it is not necessarily in the most expensive postcodes where agents charge the highest fees.
Some of the highest average commissions are charged in the SE1 (Bermondsey), NW11 (Golders Green) and W6 (Hammersmith) postcodes, although agents in some lower priced areas – E8 (Dalston), N8 (Crouch End) and SE28 (Thamesmead) – offer some of the lowest commission rates.
The majority of the London estate agencies surveyed quoted 1.5% commission, but 15% of agents quoted 1%. The highest commission level quoted was 2.5%.
There were several postcode areas including Islington (N1) and Clerkenwell (EC1) where commission levels spanned the range from 1%-2.5%, which means that on a property priced at the London average of £342,749 (according to latest Land Registry figures), the seller could be paying anything from £4,113 to £10,282 including VAT to sell the same home.
Estate agents’ reputation for being guarded about their fees was borne out by the survey, with one in five of agents refusing to say what their fees were, either on the phone or via email. Only one agency, Winkworth, which has 43 London offices, displayed fees online.
One in four agents said that their fees are negotiable based on either a realistic valuation of the property or depending on the price range of the property. Many agents in the survey stressed that an agency should not be chosen simply on their commission rates but on service, track record and marketing.
The survey also found that estate agent fees in London at an average of 1.7% are more or less in line with the national average of 1.8% – contrary to the perception that London estate agent fees are the highest in the country.
Estate Agent Today
Thursday, 1 December 2011
Off Plan London Homes Promise Higher Returns for Investors
Reuters reports that Cordea Savills, the fund management arm of British real estate consultancy Savills PLC, has launched a 150 million pound fund that will buy prime London homes, giving Asian investors an alternative way to invest in the sector.
Interest in London residential property has been on the rise in recent months among investors from China, Hong Kong and Singapore, spurred in part by state-led measures to cool real estate markets in Asia.
At the upmarket One Hyde Park development, for instance, Asian investors accounted for 30 percent of buyers.
Cordea Savills' new fund is expected to benefit from the strong Asian interest in London, and indications of interest have been strong so far, said Brian D'Arcy Clark, head of its residential acquisitions, especially on the back of strong demand from Chinese buyers.
"There's very good evidence that Chinese investors want to invest in London and there's pent-up demand from high-net-worth individuals from China to come into London," Clark said.
Cordea Savills expects its fund to see net returns of about 18-20 percent a year, and said investors who are keen on the fund will need to put in a minimum of 200,000 pounds.
The fund, which closes in January, will invest in London property by forming joint ventures with developers and by committing to acquire apartment units before construction to get better prices, Cordea Savills said.
Investing in the fund would allow investors greater diversification and higher potential returns as the fund would be able to acquire assets in bulk and thus at better discounts, Clark said.
Interest in London residential property has been on the rise in recent months among investors from China, Hong Kong and Singapore, spurred in part by state-led measures to cool real estate markets in Asia.
At the upmarket One Hyde Park development, for instance, Asian investors accounted for 30 percent of buyers.
Cordea Savills' new fund is expected to benefit from the strong Asian interest in London, and indications of interest have been strong so far, said Brian D'Arcy Clark, head of its residential acquisitions, especially on the back of strong demand from Chinese buyers.
"There's very good evidence that Chinese investors want to invest in London and there's pent-up demand from high-net-worth individuals from China to come into London," Clark said.
Cordea Savills expects its fund to see net returns of about 18-20 percent a year, and said investors who are keen on the fund will need to put in a minimum of 200,000 pounds.
The fund, which closes in January, will invest in London property by forming joint ventures with developers and by committing to acquire apartment units before construction to get better prices, Cordea Savills said.
Investing in the fund would allow investors greater diversification and higher potential returns as the fund would be able to acquire assets in bulk and thus at better discounts, Clark said.
Thursday, 10 November 2011
Prime London Property Snapped Up By Nigerian Property Investors
Nigerians bought £87 million worth of UK million-pound properties in 2010, according to a research report published by Hawker Beechcraft Corporation, HBC, a world- leading manufacturer of business, special mission and trainer aircraft.
The report indicates that the total value of the purchase represents about 29 percent of the total purchased by Africans who spent a whooping £305.2 million.
The total estimates spent by overseas buyers according to the report was put at N900 billion £3.75 billion for the million pound London properties, which is over 50 percent of million-pound property sales in London coming from non-UK nationals.
The report comes amid wide spread discontent on the pace of housing development in the country and the recent down turn in the nation’s housing sector with most property value nose diving following pervading credit crunch.
Analysts say the huge London million-pound property investment by Nigerians reflect capital flight which became obvious at the wake of uncertainties in the financial system, with investors seeking safe haven for their money.
HBC believes that the large number of foreign buyers of prime property in London has contributed to an increase in business flights to some of the region’s main business airports.
Indeed, its analysis reveals that between January and September this year the number of business flights to Biggin Hill, London City and Farnborough have increased by 46 percent, 38 percent and 34 percent respectively.
In terms of the largest number of foreign buyers in the capital by country, Russian nationals top the league having acquired an estimated 266 prime properties worth around £429 million last year.
On a regional level, Europeans (excluding UK nationals) accounted for around £1.57 billion of million-pound property purchases in London last year – some 974 properties. This was followed by nationals from Asia Pacific and the Middle East , with 640 and 298 properties purchased respectively. Africans purchased a total of 189 properties.
Sean McGeough, HBC president, Europe, Middle East and Africa, said, “As one of the most desirable cities in the world, it’s no surprise that London ’s property market is attracting a large number of overseas buyers. Given that many of these individuals lead busy lives and often travel a huge amount, this helps explain the rise in flights to London ’s business airports.”
Businessdayonline
The report indicates that the total value of the purchase represents about 29 percent of the total purchased by Africans who spent a whooping £305.2 million.
The total estimates spent by overseas buyers according to the report was put at N900 billion £3.75 billion for the million pound London properties, which is over 50 percent of million-pound property sales in London coming from non-UK nationals.
The report comes amid wide spread discontent on the pace of housing development in the country and the recent down turn in the nation’s housing sector with most property value nose diving following pervading credit crunch.
Analysts say the huge London million-pound property investment by Nigerians reflect capital flight which became obvious at the wake of uncertainties in the financial system, with investors seeking safe haven for their money.
HBC believes that the large number of foreign buyers of prime property in London has contributed to an increase in business flights to some of the region’s main business airports.
Indeed, its analysis reveals that between January and September this year the number of business flights to Biggin Hill, London City and Farnborough have increased by 46 percent, 38 percent and 34 percent respectively.
In terms of the largest number of foreign buyers in the capital by country, Russian nationals top the league having acquired an estimated 266 prime properties worth around £429 million last year.
On a regional level, Europeans (excluding UK nationals) accounted for around £1.57 billion of million-pound property purchases in London last year – some 974 properties. This was followed by nationals from Asia Pacific and the Middle East , with 640 and 298 properties purchased respectively. Africans purchased a total of 189 properties.
Sean McGeough, HBC president, Europe, Middle East and Africa, said, “As one of the most desirable cities in the world, it’s no surprise that London ’s property market is attracting a large number of overseas buyers. Given that many of these individuals lead busy lives and often travel a huge amount, this helps explain the rise in flights to London ’s business airports.”
Businessdayonline
Saturday, 5 November 2011
London Property 'Safe Haven' Status
As the perceived safe havens of US debt, Swiss francs no longer appear so solid, demand for central London property has soared among foreign investors seeking to preserve their wealth, reports Citywire.
But although central London real estate’s safe haven status is secure in the near term, managers of UK property investment trusts have warned that prolonged social unrest and further financial markets regulation could lessen its allure.
‘What we’ve seen throughout the whole of this year is that whenever there’s been a shock [abroad] of some sort ... there’s been another phone call to London agents saying: “We’ve got 30 or 40 million, which we’d like to put in the safe haven of central London,”’ said Jason Baggaley, manager of Standard Life Investments Property Income.
Speaking at an event hosted today by the Association of Investment Companies (AIC), he added: ‘On a global basis, London is seen as very much a safe haven for real estate.’
Richard Kirby, manager of F&C Commercial Property Trust, noted that central London had a ‘very strong’ local economy, an affluent population and a major role as an international centre. ‘And to that extent we’ve seen the numerous overseas buyers trying to buy into central London at some very, very hairy yields – but for them it’s a matter of wealth preservation,’ he said at the same meeting.
But although central London real estate’s safe haven status is secure in the near term, managers of UK property investment trusts have warned that prolonged social unrest and further financial markets regulation could lessen its allure.
‘What we’ve seen throughout the whole of this year is that whenever there’s been a shock [abroad] of some sort ... there’s been another phone call to London agents saying: “We’ve got 30 or 40 million, which we’d like to put in the safe haven of central London,”’ said Jason Baggaley, manager of Standard Life Investments Property Income.
Speaking at an event hosted today by the Association of Investment Companies (AIC), he added: ‘On a global basis, London is seen as very much a safe haven for real estate.’
Richard Kirby, manager of F&C Commercial Property Trust, noted that central London had a ‘very strong’ local economy, an affluent population and a major role as an international centre. ‘And to that extent we’ve seen the numerous overseas buyers trying to buy into central London at some very, very hairy yields – but for them it’s a matter of wealth preservation,’ he said at the same meeting.
Tuesday, 18 October 2011
Belgravia and Knightsbridge Flats Performing Well in High End Property Market
Sales of London’s most expensive homes reached a record as foreign buyers dominate the city’s luxury residential market, Savills Plc (SVS) said.The number of houses and apartments that sold for more than 5 million pounds ($8 million) rose to 262 from 200 in the nine months through September, 31 percent more than a year earlier, the real-estate broker said today in an e-mailed report, reports Bloomberg.
Overseas buyers make up 65 percent of the market for homes costing more than 5 million pounds, according to the report. The costliest purchases remain concentrated in central London neighborhoods such as Belgravia, Knightsbridge and Mayfair, said Lucian Cook, Savills’s director of residential research.
“Knightsbridge and Belgravia have a high proportion of London’s best-performing flats,” Cook said in the report. “Mayfair has seen significant levels of capital investment and improved amenities which have underpinned price growth.”
International buyers are investing in London homes to protect wealth amid financial or political volatility at home. Europe’s sovereign-debt crisis may be worse than the Great Depression, according to Bank of England Governor Mervyn King, and uprisings in countries including Libya, Syria and Egypt have cost a total of $55.84 billion, consultant Geopolicity Inc. said today in a report.
Overseas buyers make up 65 percent of the market for homes costing more than 5 million pounds, according to the report. The costliest purchases remain concentrated in central London neighborhoods such as Belgravia, Knightsbridge and Mayfair, said Lucian Cook, Savills’s director of residential research.
“Knightsbridge and Belgravia have a high proportion of London’s best-performing flats,” Cook said in the report. “Mayfair has seen significant levels of capital investment and improved amenities which have underpinned price growth.”
International buyers are investing in London homes to protect wealth amid financial or political volatility at home. Europe’s sovereign-debt crisis may be worse than the Great Depression, according to Bank of England Governor Mervyn King, and uprisings in countries including Libya, Syria and Egypt have cost a total of $55.84 billion, consultant Geopolicity Inc. said today in a report.
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