London property prices buoyed by overseas demand

London property prices are continuing to appreciate, on the back of growing demand, particularly from overseas, according to various reports.

The latest report from international estate agents Savills shows that investors from India have replaced the Chinese as the largest group of overseas buyers purchasing property for sale in London. 

Asia's expanding economies, growing middle class and favourable foreign exchange rates, has made London a magnet for Asian investors, particularly those from India.

"There are more buyers coming from India and Pakistan than China - and they're spending more," the report stated. "This group is now the most important to the London market among the emerging economies."
Savills estimates that a total of £16.5 billion will have been invested in London by overseas property investors during the five-year period to 2011.

Yolande Barnes, head of Savills research, said: "We think that the already established preference of buyers from the Asian subcontinent for London will mean that Indians will be among the most important buyers from the emerging countries in the future."

In 2010, Indians bought residential property worth £290 million in some of London's most affluent areas, pushing up demand for property for sale in Notting Hill and property for sale in Holland Park, among other parts of Prime London. 

The report says that there is specifically high demand for properties in Mayfair, Belgravia, South Kensington and Chelsea, as well as properties in Holland Park, Regent's Park and St John's Wood.

Historically, property price rises in some of London's most prestigious areas have often rippled out to secondary areas, ensuring greater demand for property for sale in Bayswater, for example, among other highly regarded locations.

Foreign purchasers from other parts of the world, including the USA and Europe, are also helping to fuel greater demand for homes in prime London areas. Overseas purchasers are benefiting from price reductions due to the poor state of the British sterling – 17% for US dollar buyers and 16% for Euro buyers on 2007 pre-crash prices.

Ed Mead, director of sales at Douglas & Gordon estate agents, comments: "There continues to be a strong appetite from well heeled international and city types looking to buy property in London and despite stock levels increasing, demand still outstrips supply so it looks as if prices will continue to rise.

"Although property values in the capital are increasing, there is still a discrepancy between actual values and some rather over inflated asking prices."

The latest Knight Frank study shows that the average price of a home in Prime London appreciated by 1.4% in May 2011, contributing to annual growth of 8.3%. Prices have now increased by 33% since their recent post-credit crunch low in March 2009.

Liam Bailey, head of Knight Frank Residential Research, said: "Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009."

Overseas nationals are also looking to buy property in Maida Vale, West London, and its surrounding areas, according to Marsh & Parsons estate agents.

The company recently opened an office in Little Venice to specifically cater for growing demand for property in Maida Vale and Little Venice.

Peter Rollings, Managing Director of Marsh & Parsons, recently commented: "Maida Vale's property market is extremely popular.  The area is proving hugely attractive to both overseas buyers looking for easy access to the City and the local international schools and UK buyers wanting to move into such a great location."

Source: Marsh & Parsons – Property for Sale in Maida Vale & Mayfair

Hotspot Kensington offers good investment potential

Property prices in Kensington, like much of prime London, are on the up. The foreign demand remains a key driver of price growth, favourable exchange rates mean overseas buyers are benefiting from significant price reductions (17 percent for US Dollar buyers and 16 per cent for Euro buyers) on 2007 pre-crash prices. 

The past decade has seen countless wealthy Russians, Indians and Arabs flocking to buy up swathes of homes in London's most exclusive neighbourhoods. Now the Europeans are following suit.

"While Asian buyers account for the majority of sales of new-build properties in the capital (60% of zone 1 new-build sales in the 6 months to April 2011), European buyers are among those at the forefront of the market for existing homes. In terms of non-UK buyers French buyers account for 6% of the market, Italians 4.5%, Greeks 3.1% and Swiss 2.5%," said Liam Bailey, head of Knight Frank Residential Research.

Whether it is property for sale in Kensington, property for sale in South Kensington or property for sale in North Kensington, homes in each of these affluent areas are in strong demand.

Packed full of different cultural attractions, these areas have a real cosmopolitan feel to them, making them some of the most exciting places to live and work. There is a delightful blend of people residing throughout Kensington, including many different international communities in North Kensington and South Kensington.

These areas are home to some of the most expensive homes in Britain and feature a wide choice of beautiful homes on some of the most attractive residential streets and private roads in London.

The majority of properties in South Kensington, for example, date back to the Victorian era, when there was a boom in new homes, along with the Georgian period. The area is dominated by striking period buildings, including town houses, detached houses, period conversions and mansion blocks. However, there are not many high-rise residential property buildings.

The ever growing shortage of homes in Kensington and its surrounding areas in relation to demand suggests that there has never been a better time for investors looking to buy property in Kensington, North Kensington or South Kensington.

Bailey continues: "Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009."

The latest statistics released by Knight Frank show that average Prime London property prices have risen by 33 per cent since March 2009,

Moving forward, London property prices are expected to continue rising at a relatively rapid rate, which should also benefit markets in other primary locations, including properties in Mayfair, Chelsea and Westminster, among others.

Mark Harris, chief executive of wealth management firm SPF Private Clients, commented: "The forecasts suggest prime central London has still got some way to go with prices - they're expected to rise 30 per cent in the next five years."

Source: Estate Agents - Property for sale in London & Property for sale in Mayfair

Strong demand for prime London properties for sale

Prime central London property prices continue to appreciate at a rapid rate driven by insatiable demand among domestic and international property buyers.

With recent research by Knight Frank revealing that average prime central London property prices have increased by an average of £767 every day over the past 12 months, it is little wonder that more property investors are inquiring after property for sale in London.

Demand is particularly strong for property for sale in Westminster, along with property for sale in Mayfair and property for sale in Chelsea, as these areas are among the strongest performing London property markets.


The prime London property market is being led by properties in the £1 million to £5 million price bracket. This means that as well as property in Westminster, Mayfair and Chelsea, demand is also high for premium homes in other areas, such as Kensington, Fulham and Notting Hill.


The influx of wealthy foreign buyers and their influence at street level is evident in many expensive parts of London. This is adding to demand for properties in other premium areas, including property for sale in Holland Park, North Kensington and South Kensington.

Property exhibitions in Singapore, Kuala Lumpur and Hong Kong are driving more Asian property buyers to London, according to research by CB Richard Ellis (CBRE).

Figures supplied by CBRE show that more than £800 million worth of property - equivalent to around 2,500 properties in London - were sold at exhibitions in the three cities last year.

Peter Rollings, chief executive of London estate agents Marsh & Parsons, says that more than 20 buyers are now registering for every prime property for sale in London registered on the market.

Commenting on the London property market, Rollings told the press: "We've seen some of our busiest months since 2007 this year, and are in the middle of another surge of activity. House prices have already risen five per cent this year, and we anticipate further rises as competition for good quality stock continues to heat up."

The dislocation between the central London market and the wider UK market has widened into a chasm over the past 12 months, according to Liam Bailey, Head of Knight Frank Residential Research.

"Over the past 12 months price growth in central London has totalled 8.3 per cent, whereas in the UK the corresponding figure has been a fall of -1.3 per cent", he said.

He added: "I have pointed to international demand as being a key contributor to London's bounce. There is no doubt that this is true – with more than 60 different nationalities active in the market over the past 12 months. However we shouldn't underestimate the impact of the central London economic revival on pricing."

Bailey is one of many housing experts who believe that the revival in the London property market is sustainable even if overseas demand begins to wane. This is potentially good news for anyone looking to buy property in London, particularly property for sale in Westminster, Mayfair and Chelsea.