This international appetite has allowed the new build sector to remain buoyant as average new build residential prices in London rose by 56.3% between Q1 2009 and Q2 2013.
In addition to the Chinese, Russian and Middle Eastern lifestyle buyers that have previously driven the market, Chesterton Humberts has noticed an increase in buyers from these countries looking primarily for investment purposes. It has also identified a number of new nationalities that are becoming more active in the London property market, including Nigerians, French and Greeks, due to political strife, economic difficulties and tax threats to personal wealth.
London’s established safe haven status, combined with its legal transparency and the good long term performance of its property market, means that it features on many international buyers’ wish lists. Price growth has been particularly strong over the past few years with Nationwide reporting that average new build capital values have risen by 47.7% since 2009, while the average premium for luxury new build property in London can be anything from 10-15% and in some cases considerably higher.
Chesterton Humberts’ Head of International Residential Developments, Samuel Warren, highlighted that there was £2.2bn of investment in luxury new build homes last year and expects this figure will be exceeded this year:
He said:
“With demand for prime new build properties set to remain robust and new supply struggling to keep up, we expect investment volumes will be higher this year than last. The relative weakness of sterling means that many overseas buyers can achieve effective discounts on purchase price whilst acquiring an asset that will almost certainly appreciate considerably over time and which they will have little difficulty in selling when the time comes.”
