Dollar-rich buyers wait in the wings

Dollar-rich buyers are getting ready to swoop in prime central London, as the value of sterling plummets along with house prices and transaction levels.

According to property finding company Property Vision, a subsidiary of HSBC, the majority of those buying in dollars are not from the States but from the Middle East, Russia and parts of mainland Europe.

The company says that, despite reports like yesterday’s from Nationwide saying house prices are down 15.9% year on year, the reality in central London is that reductions are 30%.

A spokesman said: “If you add to that the fact that the £ has effectively devalued by 25-30%, then in reality, buyers will be paying up to 60% less than a year ago. The good news is that there are at least buyers again to get the market moving.”

According to Property Vision, 80% of Middle Eastern buyers it has spoken to are now looking to buy in London this summer.

London estate agents Douglas & Gordon confirmed foreign interest and said they were gearing up by hiring multi-lingual staff, while estate agents Wetherell said they were seeing a ‘significant’ rise in foreign applicants.

Property Vision director James Geddes, who heads up their Middle East team, said: “It’s similar to what happened after Black Wednesday in the early 90s.

“Then, almost overnight, the devaluation of sterling and the reduction in property prices made London a cheaper place to buy: cash-rich international buyers are now looking for bargains at all levels and in all the prime areas.”

Shaun Crocket, sales director at Wetherell, said: “It is difficult to predict what will happen this year because the current economy is completely different to the late 1980s. Then, interest rates went up, not down! As the dollar and euro continue to strengthen against the £, and property prices are reduced, we are already seeing a significant increase in demand from overseas buyers who are attracted by properties that are, to them, now half price.”

Ed Mead, director at Douglas & Gordon, said: “We have seen 20% more online registrations from overseas buyers compared to last year at this time. Nationalities showing the most interest are from Italy, France and the Middle East, who are registering on our website. Currently, 70% of our sales transactions in central London are to foreign buyers.”

He added: “Across our network of offices, our staff speak 14 different languages. In the Chelsea office alone we have five languages, and with the sharp increase in interest from the Middle East, Europe and some Indians and Russians, I rarely hear them in English!”