Foreign investors snapping up UK real estate
UK-based real estate is attracting lots of attention from buyers in other countries, analysts have noted.
According to Savills, Britain – and London in particular – has established itself as a safe haven for foreign investors at a time when many nations are experiencing economic turmoil, the Financial Times reports.
The organisation said wealthy Russian buyers are particularly keen to access the market, with high-end property proving especially popular with this group.
Savills is confident that foreign investors will continue to transfer money to the UK in order to buy expensive homes, unless the government makes fundamental changes to the tax regime.
"Unless we tax these kind of buyers beyond all comprehension, London will remain strong," said Jonathan Hewlett, Head of London Residential at the firm.
Knight Frank is also confident about the future, despite an increase in stamp duty for properties worth more than £2 million being announced in this week's Budget.
Liam Bailey, Head of Residential Research at the organisation, stated that unless more "draconian" wealth targeting measures are put in place, the "global appetite" for property in London should remain secure. Indeed, he argued that reforms to the tax regime appear to be doing little to put foreign investors off making a purchase in London.
According to the latest figures from Knight Frank, homes worth £5 million or more are proving to be especially appealing to buyers from other countries.
Sales of properties in this price bracket came to £365 million in the first 11 weeks of 2011, it stated. However, this increased to £723 million in the corresponding period of 2012 – an increase of 98 per cent.
The observations from Savills and Knight Frank back up a recent report from KPMG, which also flagged up London as a hotspot for foreign investors. This is despite the fact the UK is dealing with its own economic woes, such as sluggish growth and rising unemployment.