Is this the end for overseas property investment in London?
It’s no secret that London is one of the world’s most attractive property markets however, interest in the high end property market from overseas investors has started to cool.
Rising property values and the strength of the sterling has priced many investors out of the market and has, in some cases, made the city unaffordable.
Knight Frank research shows that, when compared to the previous year, the number of overseas investors purchasing property in London dropped in H1 2015.
Buyers from Hong Kong decreased from 5.6% to 3.3%, buyers from Singapore were down from 3.8% to 1.4% and the amount of investors from Malaysia decreased by 0.3%.
Case Study: Battersea
Battersea is notably one of the UK’s most talked about redevelopment projects however, investor sentiment in the project has slowed.
A ‘softening of interest’ from investors from Malaysia and Southeast Asia has appeared to dampen Battersea’s luxury market.
“We are witnessing softening of interest among buyers from Malaysia and Southeast Asian regions, probably due to the prevailing volatile currencies and uncertainty in economic outlook. No exchanged contracts have been cancelled to date,” Sime Darby, which owns 40% of the Battersea project commented.
In 12 months to June 2015, there has been a 10% decrease in the value of luxury properties in the Battersea area.
The rise of the regions
Despite the decline of investment in London’s luxury property market, it’s not all doom and gloom.
Property in some of the UK’s leading towns and cities still offers investors strong returns. Manchester, Leeds, Liverpool and Birmingham have all been names as key locations for property investment.
In the coming months, the regions could experience a positive influx of investment from overseas buyers who wish to move their money away from the London market.