Slowing price growth in central London, double-digit rises in outer London and a marked jump in transactions indicate a ‘less abnormal’ market, argues Tom Bill, Associate, Knight Frank Residential Research:
“Two milestones were passed last year that demonstrate the growing importance of mainland Chinese buyers in London. First, China replaced Greece as one of the ten largest groups of buyers in prime central London. The top-ten, headed by the UK, the United Arab Emirates and Russia, was otherwise unchanged from 2012, and China was in joint fourth place with Italy.
“Second, China overtook Russia as the country granted the most tier one investor visas in the UK since the scheme started in 2008. The UK government grants the visas in exchange for investments of between £1 million and £10 million and 187 were issued to Chinese nationals in 2013, the highest ever total to a single nationality in one year.”
“Rental yields were 2.84% in prime central London and 3.67% in prime outer London in February. Though low by real estate standards, capital value growth means that total returns over the same period were 10.6% in prime central London and 15.1% in prime outer London. The latter was the highest among a set of mainstream asset classes in the last year.
“It underlines how price growth is spreading beyond central London as the UK economic recovery takes hold. In a world where stock markets are skittish, many commodity prices are falling and hedge fund managers are struggling to second-guess central bankers, it underlines the strength of London residential property as an investment class.”
.jpg)
Comments