An outspoken high-end London estate agent says millionaire foreign buyers purchasing “cheap” properties in the capital represent what he calls “the first fruit of Brexit.”
Trevor Abrahmsohn, who runs Glentree International estate agency and is one of the founders of OnTheMarket, says “the word is out” that London property prices are now cheap, commonly reduced 30 per cent or more thanks, he says, to “the ridiculous stamp duty hikes of the last Chancellor”, George Osborne.
Abrahmsohn says that in the past year his firm has enjoyed sales worth £381m and says “this represents 10 to 15 per cent of all luxury properties sold in London.”
In a blog he says Russians and Eastern Europeans are back in the fray, despite the sanctions and “vitriolic rhetoric” that he says is being “spewed out by the press.”
“Foreign buyers are gorging themselves on a ‘feeding frenzy’ of property where the combination of the currency and price discount of up to 50 per cent has not been seen since the turbulent days following the 2008 credit crunch” claims Abrahmsohn.
He says domestic purchasers are exacting attractive deals on properties of between £1m and £3m “such that a sale in this sector, which was taking six to nine months, now consumes only six to eight weeks” with stumbling blocks invariably being “tortuous regulatory hurdles” in obtaining a mortgage or steering a path through a sales chain.
Abrahmsohn’s comments come after reports issued just this week by both Savills and Knight Frank.
Savills says average prime central London house prices have shown a further fall in the second quarter of this year. The latest drop was 0.9 per cent in the April-May-June period, leaving prices now 17.6 per cent below their 2014 peak.
Year-on-year price falls now stand at 3.8 per cent, slightly better than the annual 4.2 per cent fall recorded at the end of the first quarter.
Meanwhile Knight Frank says the current period of prime central London price declines has lasted for almost the same length of time as that recorded in the early 1990s.
The agency gives a less drastic figure for price falls than Savills, claiming the current peak-to-trough decrease of only around 9.0 per cent on average - but it does not seem to endorse Abrahmsohn’s view that demand is being propped up by foreign millionaire buyers.
“Demand remains price-sensitive and driven to an increasing extent by buyers with a need to move, such as schooling or downsizing” says Knight Frank, which says supply has also risen as more landlords attempt to sell following tax changes.