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British buyers outspending overseas buyers in prime London market, agents suggest

The latest data from EA Shaw, recently acquired by CBRE, shows that buyers from the UK now account for 59% of all buyers recorded by the prime property specialists, and are leading purchases of properties worth over £2 million.

British buyers have committed more money to prime property year on year since the recession trough, indicating confidence in the market, its report shows and the firm has found at the very top end of the market, British buyers now account for two thirds of it’s sales, seeking properties over the £2 million mark, often outside of the traditional high value areas of Knightsbridge and Chelsea.

‘London property is known for attracting overseas investment, and during the recession the flow of cash from overseas has dominated the Capital’s market. However, over the last year we have noticed a resurgence of British buyers spending large sums, and this has continued into 2013,’ said Lisa Hollands, managing director of EA Shaw.

‘Reassured by the stability of the market, British buyers are now cherry picking the best of London’s prime property, targeting high value, exclusive homes. They are attracted to unique properties in the capital city in rare and sought after addresses. Areas such as Covent Garden are proving popular with Brits looking for luxury residential space in a bustling environment,’ she added.

Meanwhile, the latest spring Market Intelligence from Crayson covering the W14, W11, W10, W8 and W2 postcodes in London shows that sales, prices and new instructions have all increased and in contrast to the slow start in 2012, sales activity in prime postcodes has been brisk, with 36% more properties sold than at this point a year ago.

‘We have seen an increase in new instructions so far this year, with significant pent up demand meaning our outlook for 2013 remains very positive indeed. At the end of the first quarter of 2013, values, transaction numbers and new stock levels have all improved,’ said Nick Crayson.

The firm’s data shows that so far this year buyers in Notting Hill, Holland Park and Kensington have spent an average of £126 million per month, 17% more than at this point in 2012.

‘Whilst a proportion of this increased spend can be attributed to price rises which have increased by 9.1% over the past 12 months, the latest figures do show transaction levels also rising,’ explained Crayson.

In the last three months total sales have risen by 22% compared with the same period a year ago. The number of apartments sold increased by 25%. Demand for houses over £2 million has been particularly noticeable this year and transactions have increased by 24% in the last three months.

The firm points out that in recent years a lack of stock has been a key theme in the prime London market, with interested buyers far outweighing sellers. So far this year, new stock levels have improved dramatically.

‘In the first quarter of 2013 the number of new property instructions in our area were 65% higher than 2012 averages. The most significant increases in new stock being listed have been within Notting Hill and the Kensington and Chelsea postcodes where properties listed for sale rose by 101% and 86% respectively,’ said Crayson.

Further clarity on the implications of the new annual charge and changes to offshore ownership over £2 million, outlined in December's Draft Finance Bill and the March budget, have resulted in increased sales activity over the £2 million threshold as well as an increase in new instructions.

The firm believes that there will continue to be lot of interest from overseas buyers as the wealthy continue regard prime London property as a preferred asset class.

‘It is a common misconception that overseas buyers are purchasing in London remotely, using overseas offshoots of UK property companies to source and buy properties. Whilst this may be the case with new schemes launched overseas, in our experience the vast majority of prospective buyers are coming to us directly, either in person or through a representative, often a London based buying agent,’ explained Crayson.

‘As well as those looking for an investment outside their home country, many are choosing London as a place to relocate to. The number of residents in Kensington and Chelsea increased by only 0.5% in the past decade,  however an increasing number of residents were born outside the UK and now choose to call this area home. UK born residents in Kensington and Chelsea have dropped by 13% over the last decade, but the number of residents born elsewhere in Europe rose by almost 30%, with a 15% rise in those born outside Europe,’ he added.

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