International buyers returning to prime markets but remain below pre-Covid levels

International buyers appear to slowly be returning to the prime central London (PCL) market, according to Hamptons data.

Figures released by the agent for 2022 showed 39% of PCL sales last year were to international buyers, up from 35% in 2021 but still below a high of 55% in 2018.

Hamptons said interest remains low compared with pre-Covid levels, when the share of homes bought by international buyers averaged 48% between 2015-2019.

The largest shift in 2022 came from American buyers, the agent said.

They bought 7% of homes sold in PCL in 2022, more than triple the share recorded in 2021.

This has predominantly been driven by the strength of the US dollar, Hamptons said.

Due to currency changes, a property costing £1m in 2021 would effectively cost a US buyer £900,000 in 2022, equating to a 10% saving.

In response to the continued British National Overseas (BNO) Visa programme, Hong Kong buyers have increased their share from 2% in 2021 up to 4% in 2022, the data shows, with these buyers also benefiting from the exchange rate.

However, Middle Eastern and European buyers remain scarce compared to pre-Covid.  European nationals made up 12% of PCL buyers in 2022, 5% fewer than in 2019. 

They still remain the biggest international buyer group.  Meanwhile Middle Easterners bought 7% of homes in 2022, down from 10% in 2019.

Meanwhile, domestic demand continues to dominate sales in Greater London.  As a result, the share of homes bought by international buyers remained flat at 23% in 2022 – the third joint lowest share on record.

Whilst remaining the biggest international buyer group, EU buyers fell for the third consecutive year.  

They made up 9% of buyers in 2022, down from 10% in 2021 and 13% in 2019.  

The last time this proportion was so low was in 2017, the year after the Brexit referendum.  Middle Eastern buyers also dropped a percentage, purchasing 2% of homes.

Conversely, two groups filled the gaps, each growing a percentage point with Hong Kong purchasers accounting for 3% of purchases and Americans 2%.