French buyers have become a driving force in central London’s luxury housing market, according to new data on Monday. Buyers from France accounted for 11% of all high-end deals involving overseas buyers in the British capital in the first nine months of this year, making them the most active cohort of foreign buyers.
French buyers were followed by Hong Kong and America, who were tied for second, each making up 9.2% of all home sales to foreigners in central London.
The report on foreign buyers in London marks a shift from recent years, in which mainland Chinese buyers were the biggest foreign buyer group in central London. They accounted for 15% of all foreign transactions in the capital during the first nine months of 2019, and this year were down to 8.3%—underscoring how the pandemic has interrupted usual travel and consumer patterns.
As a result of travel restrictions, U.K. buyers accounted for a greater percentage of luxury deal making in London in 2020, up to 59% in the first nine months of the year compared to less than half during the same period a year ago.
Home prices in prime central London have been falling for years, in the wake of property transfer tax increases in 2014 and 2016. Meanwhile, a weakened British pound has created an opportunity for foreign buyers. It’s made London an attractive destination for overseas home buyers despite the Covid-19 health crisis and background noise of Brexit.
Since the Brexit referendum in mid-2016, euro-based buyers have gotten an effective discount of 30%, while dollar-based buyers now see around a 27% discount compared to four years ago. That is a big number, irrespective of the latest rhetoric surrounding Brexit.
The U.K. plans to levy an additional 2% stamp duty on foreign buyers beginning in April, an added cost that has spurred some outside the country to purchase in London before the new tax goes into effect. Other significant buyer groups in London in 2020 have included Indian, Italian, Swiss and Australian buyers, according to the report.
Article source: Mansion Global