Samir Salya looks at who is investing in Central London

The latest figures from London Central Portfolio show that homebuyers of luxury property represent 45% of all sales in prime central London. This is three time as many as the previous 12 months, due to the increasing discounts available.

This has resulted in an increase of transaction numbers in luxury sales. There was a 23% increase in activity during Q2 2017 in the £5m to £10m category. On the other hand, there has been a significant fall in the numbers of buy-to-let (BTL) investors in central London. Their number has fallen by 33%.

Buy-to-let decreases

The average price of a BTL property in central London has dropped by 27% to £816,428 over the last year. This has led to houses in the prime areas becoming much more popular, with an increase in sales of 4.1% and an increase in average prices of 4.9% in Q2.

The number of flat sales have dropped 11% and the prices have gone up by only 2.6%. There has also been a huge 55% decrease in sales during Q2 for new-builds in Prime Central London (PCL). The market overall has seen a decline of 9%, so this is significant.

Where are biggest buyers from?

The biggest purchasers are from Far East Asia – they represent 36% of purchases over the last year. They’re followed by buyers from India (22%) and the Middle East (21%).

There has been a prolonged period of low price growth in PCL due to buyers constantly needing to adjust their strategy, thanks to changes in taxes and the political and economic uncertainty caused by Brexit and a snap General Election.

Despite this, PCL showed a growth in Q2. According to data from the Land Registry, average prices got up to £1.9m following a quarterly increase of 5.8%. This was boosted by a small number of high value sales. Transactions have stayed at extremely low levels, with just 3,750 during the last 12 months.

Slower activity in certain categories

Activity has been much slower in the category of £1m and under price ranges. This is because it’s generally largely dominated by BTL investors. This sector saw a 9.4% fall in sales in Q2 2017.

Buyers are increasingly seeing the attractions of unique older properties, rather than new builds. This has led to speculators hanging back in the face of uncertain returns.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings, and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing