Asian Buyers Boost Demand for London Homes on Weak Pound, Higher Rents

Asian investors, attracted by a weak pound and rising rents, made up almost half of all buyers in the London residential property market in the past year, according to research by Knight Frank LLP.

Investors from China, Hong Kong, Singapore and Malaysia accounted for 28 percent of London home purchases in the year to March, the London-based broker said in an e-mailed statement. Purchases from the rest of Asia, not including India, amounted to 18 percent, and U.K. buyers represented 37 percent of sales.

“Current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” Liam Bailey, head of residential research at Knight Frank, said in the statement. “The interaction of currency movements, strong capital price growth and, more recently, rising rents, have created an attractive investment case.”

Chinese investors are also looking to buy property overseas to spread their risk if the mainland China market bursts, Knight Frank said. Many are looking to gain access to U.K. universities, with the number of Asian students studying there rising 175 percent over the past decade, the broker said.

The most attractive homes for Asian investors are located in the two central London zones and within a few minutes’ walk of a subway station. They also have high-quality security and facilities, according to the broker. The new East London rail line is attracting foreign investors, it said.

Asian investment in London property has totaled 761 million pounds ($1.1 billion) over the past 12 months, according to Knight Frank. Of the 7,579 new homes built in the last year in the 11 boroughs that make up central London, 41 percent were bought by investors rather than buyers who planned to live in the residence.

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net.

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