By Joanna Hartley
Buyers from the Middle East make up more than half of overseas purchasers in London.
More Arabs are buying into the prime property market in London as a result of a strong dirham to the pound and falling real estate prices, it was reported on Saturday.
A survey by UK estate agent Knight Frank shows that foreign demand for property in the capital has risen by 35 percent in a year, with 52 percent of the increase coming from the Middle East, according to UAE daily The National.
The reason for the surge is the collapse of the GBP which has fallen from more than AED7.5 to GBP1.00 to as low as AED5.00 to GBP1.00.
On top of this the economic crisis in the UK has seen property prices in Londonl fall about 22 percent since their peak in 2008 - making the favoured AED5.3m to AED13.3m priced properties of Knightsbridge, Mayfair and Belgravia more affordable.
As a result UK estate agents are now starting to set up shop in the Gulf, with estate agent Chesterton Humberts being the first to move to the UAE, locating itself in Abu Dhabi a month ago. “We looked around the area for two years before we settled on Abu Dhabi. Much of the UAE has had a difficult time since the credit crunch, but Abu Dhabi is still incredibly wealthy and we saw a demand here for properties in London,” said CEO Robert Barlett.
A luxury block being developed by a consortium led by Qatari Diar Real, opposite Harvey Nichols, boasting four penthouses were last year priced at AED444m (GBP84m)each.
The cheapest unit is now being offered fpr AED21m (GBP4m), and one quarter of the buyers are from the Middle East.
“This is the time to buy. Some of the polls say the market has dropped by 16 per cent to 18 per cent, but looking at actual transactions it is much more like 25, even 35 per cent, down,” Bartlett added.
“Our Arab clients are very investment driven. They make decisions quickly, not just because they have the money but because they trust dealing with a British company.”
Furthermore, Arab buyers are cash buyers, so no mortgages are required, and they buy for the long-term, added Charles McDowell, an independent property consultant in London.
“I have found that Arabs buy but don’t sell. They don’t flip properties the way people buy and sell off-plan in, say, Dubai in the hope of a quick profit. They keep them and build up a portfolio in a very solid, old fashioned way,” he said.