March 31 (Bloomberg) -- The dominance of foreign homebuyers in central London lessened last year as high prices reduced demand and an improving global economy provided alternative safe investments, Hamptons International Ltd. said.
U.K. buyers accounted for almost half of sales in the boroughs of Kensington & Chelsea and Westminster in 2013, up from 43 percent in 2012 and 37 percent the year before, the London-based broker said in an e-mailed statement today. U.K. investors bought 77 percent of properties sold across Hamptons’s 29 London offices, up from 65 percent in 2012.
Prices in London’s luxury-home market have surged 68 percent since March 2009 as a weaker pound, the euro-region debt crisis and uprisings across north Africa and the Middle East attracted investors seeking to protect their wealth. Gains will slow by almost half in 2014, Knight Frank LLP said in December.
“As the global economy recovers and other asset and investment classes become less risky, prime central London is beginning to look fully priced, cooling interest from international buyers,” Johnny Morris, head of research at Hamptons, said in the statement. “Coupled with the surge in domestic demand across the capital, the dominance of the international buyer in London is slowly but steadily being eroded.”
The proportion of rentals by international tenants in London’s most desirable areas climbed to 55 percent from 50 percent in 2012, as an improving economy attracted more highly skilled migrant workers, Morris said.
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