The weakness of the pound following the Brexit vote has helped to propel the number of US buyers in London to second place in the international rankings, according to Knight Frank.
The high-end agency’s analysis of purchaser data going back a decade in the prime central London residential market found that US buyers have surged to the runner-up spot in the capital’s international buyer rankings, spending an average of £7.3 million ($9.3 million) in 2019 so far.
On average US buyers make up the fifth largest source of international demand. Their market share fell to a low of seventh place in 2014, but more recently a combination of increasing global investment interest from high-net-worth US buyers and the weakness of sterling post-Brexit have seen US buyers shoot up the rankings – hitting fourth place in 2018 and second place in 2019 to date, behind Chinese buyers.
Their spending power has surged in line with their increasing share of the prime London market, too, from an average £5 million ($6.3 million) spend over the past decade to £7.3 million ($9.3 million) in 2019 so far. This makes American buyers the fifth highest major spenders behind Russians (£9.1 million), Germans (£9.6 million), Turks (£10.8 million) and Saudi Arabians (£13.4 million).
“US buyers have been long-term players in the prime London residential market,” Liam Bailey, global head of research at Knight Frank, said.
“While the weak pound has undoubtedly aided the recent surge in demand from dollar-based purchasers – the real driver has been the strength of the London economy over the past two years. Not only has Brexit failed to have any impact, but over this period London has taken the dominant share of US corporate investment in Europe – leading to a significant uptick in demand for prime property from relocating US employees, entrepreneurs and business owners – especially from the tech sector.”
The most in-demand neighbourhoods for US buyers are, in ascending order, Marylebone, Mayfair, Chelsea, Islington and Belgravia.
CIT, the developers behind Regent’s Crescent, London’s only Grade I listed new-build overlooking Regent’s Park, are seeing first-hand the rise in demand from US buyers. Once completed in the second quarter of 2020, Regent’s Crescent will provide 67 Grade I listed apartments and nine ‘Garden Villas’, with prices starting from £2.9 million ($3.6 million).
Chris Richmond, head of sales at CIT, said: “Regent’s Crescent is a remarkable scheme that we are proud to be working on. Its unique combination of enchanting and historical importance, outstanding original design, unsurpassed new-build quality and remarkable location make it a very rare and special offering for the capital.”
He added: “We have experienced high levels of interest from the North American market. Buyers are attracted to the building’s traditional Regency grandeur, proximity to Regent’s Park and its unique listed new-build offering – as a result, circa 30% of the units sold to date have gone to American buyers.”
US buyers’ market share of Prime Central London sales: -
Largest foreign buyers in Prime Central London in 2019: -
United States 6.0%
Hong Kong 4.0%
Saudi Arabia 2.0%