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Investment Knowledge

London real estate ratings: what happens on the market today

London housing market is the most attractive target for investment, according to data from Gordon Rock in 2013. This information is confirmed by eloquent figures voiced by Savills experts – for the last seven years through purchase of real estate in London, the treasury was replenished with £44,000,000 of funds received from foreign investors; over 110,000 of foreign investors has been attracted to the market in the recent years. At the same time nearly 50% of them are primarily interested in the purchasing of elite objects, worth between £1,200,000 and above.

Such impressive figures are reflected in many other reports of independent consulting agencies and media portals. High demand is caused by the stability of the economic situation of the market, real estate prices in London’s independence from the fluctuations of shares, government securities and etc. High demand creates high competition, which in turn artificially provokes the rising of real estate prices.

Analysts have explored the main target audience of buyers, who have shown the most activity in the residential property segment. Experts from Savills shared the observation that the most numerous category is a group of Asian investors – namely, natives of China and Hong Kong. In 2014 they have carried out more than 27% of all the transactions for the purchase of real estate in London, which is also confirmed in a number of official conveyance solicitors reports. The most common transaction is the purchase of the apartments of the primary market, located in the central waters of the Thames. The largest number of Chinese natives of operations has been made in the following areas: Hampstead, Kensington, Mayfair, Soho, Chelsea and The City. Such a high reward activity significant earnings, which amounted to approximately 18% of annual income.

In addition to the frequency of transactions, the Chinese were able to hold the maximum number of purchases of the most expensive real estate in London, which was launched on the market at a price of £10,000,000. Investments in residential properties of similar price category were among the most crucial factors that ultimately allowed the Chinese to make money on the annual growth in housing costs.

Another large category is buyers from Western Europe. Characteristically, these investors are interested in the secondary housing market. In total they have conducted 13.6% of all the transactions. Analysts from Savills went even further – in terms of activity they are compared with foreigners in other countries, such as the US and Canada, as well as the local buyer. As for the US investors, their sales share has reached just 3.3% level. High activity in the purchase of residential properties was observed in immigrants from Arab countries. This group of customers is represented by the Egyptians, Turks, Iraqis, Jews, Moroccans, etc. The greatest success of the investment was reportedly reached by Turks, who have managed to earn on investment in real estate about 39% of the increase in capital. Experts from the agency Knight Frank explained this fact by which is now raging in Turkey. The maximum activity of Turks was observed in Chelsea, Belgravia, Westminster, Mayfair, as well as in the City – all of the above are the central districts of the capital.