The country producing the largest number of buyers of prime London properties is not China, nor from north America or the Middle East as one might imagine.
Instead it’s France, according to data from Knight Frank.
The French accounted for 11 per cent of all transactions involving overseas buyers in the first nine months of the year, says the firm.
Analysis of Knight Frank’s purchaser data highlights that Chinese buyers have dominated in recent years and accounted for 15 per cent of overseas transactions in prime central London a year ago. And at that time French buyers accounted for a mere two per cent.
Now, with Sterling still weak against the Euro as a result of Brexit uncertainty as well as the more recent pandemic, it’s all change.
“Despite the background noise of Brexit, there is smart money in Europe targeting London” according to Tom Bill, head of UK residential research at Knight Frank.
“The combination of a weak pound, a looming stamp duty hike [for overseas buyers] and less competition from buyers who need to catch a long-haul flight has created a buying opportunity” he continues.
Bill says that as Brexit negotiations continue, so has downward pressure on the pound.
“Between the period before the EU referendum and the middle of last week, Euro-denominated buyers benefitted from an effective discount (currency plus house price movement) of 30 per cent in prime central London. That is a big number, irrespective of the latest rhetoric surrounding Brexit.
“For buyers denominated in US dollars or dollar-pegged currencies, the equivalent discount is 27 per cent.”
UK buyers represent a larger proportion of overall sales in prime central London so far this year - around 59 per cent - compared to 47 per cent last year. But overall sales in the PCL area are a third down on 2019.
Knight Frank’s league table of overseas buyers in prime London reads:
- France 11.0%
- Hong Kong 9.2%
- US 9.2%
- Mainland China 8.3%
- India 7.3%
- Italy 5.5%
- Switzerland 5.5%
- Australia 4.6%
- Bangladesh 3.2%
- Japan 2.8%