International Buyers returning to Prime Central London

  • The proportion of prime central London property bought by international buyers increased to its highest level since the EU referendum in Q3 2017.
  • International buyers accounted for 51% purchases in prime central London, up from 44% in Q2 2017.
  • This is the highest proportion since Q3 2016 when 60% of prime central London property was bought by overseas buyers taking advantage of the weaker exchange rate.
  • The long-term average proportion of overseas buyers in prime central London is about 55%.
  • Buyers from the Middle East and Asia were the largest international groups, each accounting for 13% of prime central London sales followed by EU buyers at 10%.
  • Strong global growth and relatively cheap London property due to the exchange rate are likely to be factors in this change.

International buyers retreat from central London and the suburbs

  • The overall proportion of international buyers of higher end property within the M25 area fell to 25% in Q3 2017 from 29% in Q2.
  • In central London, excluding the prime areas, the proportion of international buyers fell back to 13% in Q3 2017 from 21% in the previous quarter. This change is likely to reflect the bulge in international buyers in previous quarters as they were drawn to London by the lower exchange rate.  And combines with the increased appetite for prime London property.
  • International buyers retreated from the suburbs too in Q3 2017, although this follows a particularly strong presence in Q2. The proportion of international buyers of higher end property in the suburbs fell back to 22% from 27% in Q2 2017.
  • It is not possible to know why this is the case, although it might be reasonable to infer that there was more interest in these relatively cheaper areas from overseas, particularly Europe in response to the fall in the currency, but that this is now dissipating.

 More international sellers in Q3 2017

  • The proportion of international buyers dropped back in London in Q3 2017, but the proportion of international sellers remained broadly stable. The proportion of sellers of higher end London property from overseas increased to 18% from 17% in the previous quarter.
  • However, the proportion of sellers from overseas in prime central London increased to 39% up from 33% in Q2 2017.
  • That does not necessarily suggest a lack of confidence in the London property market. Indeed with higher sales to international buyers this higher sales rate may just be reflecting turnover.