Britain’s rich are selling up and moving out of central London, replaced by super-wealthy buyers from regions such as the Middle East, China, and India, new research found.
Real estate consultancy Savills said foreign buyers inject some £3.7bn ($6bn) into London property each year, the bulk of which - £2.7bn – is used to snap up homes in billionaire markets such as Mayfair, Kensington, Notting Hill and Chelsea.
Buyers from the Middle East and North Africa are among the biggest spenders on high-end property, holding a 10 percent share of prime central London real estate and with an average spend of £4m, Savills said.
By value, MENA homeowners hold 13 percent of London’s most expensive property.
The biggest spenders in the capital come from eastern Europe and the former Soviet Union, putting down £6.2m on average.
Indian buyers, who make up nine percent of all buyers in the £5m to £15m price band, spend £3.4m while Chinese, widely tipped as the next group to arrive in force, spending £2.2m on average.
The British spend, on average, £1.5m on prime London property, Savills said.
The British capital is being boosted by the weakness of sterling and the perception that London is a safe haven for investors amid political and financial uncertainty.
“The diversity of economies from which these buyers originate and of their motivations for purchase, mean that there will nearly always be an overseas market for London property for as long as London remains a major global city,” said Yolande Barnes, head of residential research at Savills.
The demand is leading British owners to sell their homes and move to outer London, creating a “champagne tower effect” that pushes wealth out beyond the central city market.
“UK owners are disinvesting and moving out of the central areas, taking their equity with them,” said Barnes. “Central London is becoming more international as these [foreign] buyers tend to hold their stock for longer than their UK counterparts”
One Hyde Park, the UK’s priciest real estate project, has sold nearly a quarter of its apartments to wealthy Arab buyers, the CEO of Candy & Candy told Arabian Business in February.
Between 20-25 percent of sales were to Middle East buyers, with the cheapest apartment in the development costing £5.75m ($9.2m).For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.