Foreign buyers dominating the West London property market

Overseas buyers are dominating the West London property market with two thirds sold since March last year going to people from overseas, a new report shows.

This compares with just a third of the properties in the area which includes W14, W11, w10, W8 and W2, going to overseas buyers in 2011, according to a market intelligence report from Crayson.

Half of all residents in Kensington & Chelsea were born outside the UK and the motivations behind purchasing a home in London range from pure investment, buying for offspring, hedging against the instability of their own property markets, and taking advantage of currency variations.

Prices in prime London increased by 30% over the past five years for domestic buyers using Sterling. However, in Euros, prices have only increased by 16%, and by just 4% for those purchasing with US Dollars.

Prices per square foot in the area increased by 7.5% in 2012, with average price per square foot now exceeding £1,170. Properties in Bayswater and Ladbroke Grove showed the highest price increase of 14.8% in our area.

The report also reveals that London continued to dramatically outperform the rest of the UK where values rose by just shy of 1% over the course of 2012. Of the top 10 local authorities nationally, eight out of 10 were London boroughs, led by Westminster and Kensington & Chelsea.

Over the course of 2012, transaction levels across the West London market dropped by 7.8% compared with 2011. However, the investment market remained buoyant. The number of sales of Notting Hill flats priced between £1 million and £2 million rose by 12% year on year.

While transaction levels dropped in 2012 across the board, the last four months of the year saw sales activity 12% higher than for the same period in 2011, while for the first eight months of the year sales were down 17% on the same period in 2011.

In 2012 transaction levels rose for properties in the £750,000 to £1 million sector, and properties over £5 million saw a rise of 43% year on year. But they dropped for properties between £1 million and £2 million.

Properties between £2 million and £5 million showed a fall in transactions of 23%, almost certainly as a result of the increase in stamp duty for homes over £2 million, and the uncertainty over the possible implementation of a Mansion Tax.
Available stock levels have fallen by 11% in the area with 828 properties available in January 2013 compared with 932 in January 2012. Demand continues to dramatically outweigh supply, the report says.

Kensington & Chelsea has seen the greatest fall of properties available, a fall of 29.5%. However, W11 has seen a small increase in the number of properties available for sale with an increase of 2.5%.