Foreigners to Spend $6 Billion on Top London Homes in 2011 on Haven Appeal
Overseas spending on London luxury homes will total 3.7 billion pounds ($6 billion) this year as a weak pound and the city’s reputation as a financial haven attract buyers, Savills Plc (SVS) said.
Buyers based outside the U.K. will probably spend 16.5 billion pounds in the five years through 2011, or 26 percent of the total, the London-based broker estimated.
“London is a funnel for international wealth and equity coming into the U.K.,” Yolande Barnes, Savills’s head of residential research, said at a presentation today.
The pound’s 18 percent slide against a basket of currencies since the end of 2007 has attracted overseas buyers to residential properties worth at least 1 million pounds in the British capital. The perception of London real estate as a secure asset has persuaded overseas investors to buy in the city when faced by financial and political instability in their home markets, Savills said.
The largest group of foreign buyers is from western Europe, while the biggest individual purchases were made by investors from Eastern Europe, Russia and the former Soviet Union countries. The average purchase price from that group was 6.2 million pounds, Savills said.
Ukraine’s wealthiest individual, Rinat Akhmetov, paid 136.6 million pounds for a penthouse at One Hyde Park, the Financial Times reported, citing title deeds documents filed in April with the Land Registry.
The inflow of overseas money has led British owners in the prime central London market to sell more properties than they buy, investing most of the proceeds in southwest London neighborhoods such as Fulham and Wandsworth, Barnes said.
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