Prime Central London – a property market serving 35 foreign nationalities!

New research reveals the true breadth of nationalities purchasing residential property in central London, highlighting that the market is far from limited to Middle Eastern and Russian buyers.

A report by property consultants Black Brick, which tracks purchases over the past eight years, shows that the firm has represented 35 different nationalities, with Africans forming the highest percentage of buyers at 43.7 per cent of all deals. Second are Middle Eastern buyers at 17.1 per cent and then tied in third place are Asian and UK buyers at 10 per cent each.

Camilla Dell, Founder and Managing Partner of Black Brick, comments: “Although the perception is that the majority of Prime Central London’s overseas buyers are Russian or Middle Eastern, Africans have always had a big affinity with the UK and London. Over the last eight years, we have successfully acquired £236 million of residential property for African buyers from Nigeria, Kenya, Zambia, South Africa and Uganda.

“In particular, we’ve represented numerous buyers from Nigeria. Like a lot of our owner / occupier international clients, many wealthy Nigerians were educated in the UK and send their children to school here. Typically, Nigerians like gated, secure developments, as this is what they are used to back home, where most houses and apartments are located within secure compounds. Even though London is of course, much safer than Nigeria, they still prefer to be in secure developments, preferably with a 24 hour concierge or porter.”

Black Brick’s Asian data also highlights some interesting trends – 68 per cent of their Asian client base are Malaysian, followed by 25 per cent from Singapore and six per cent from Hong Kong. Overall, 50 per cent of Black Brick’s Asian clients are investors and 50 per cent are buying homes.

In the Middle East, Black Brick has represented buyers from Egypt, the UAE, Saudi Arabia, Jordan, Kuwait and Lebanon. The highest number of buyers have come from the UAE, forming 38 per cent of Black Brick’s Middle Eastern client base, followed by Saudi buyers forming 19 per cent and Egyptian buyers forming 15 per cent, with the latter having the largest average budgets at £5.175m. Of these buyers, 77 per cent have been owner occupiers, and just 23 per cent have been investors.

“In terms of future ‘one’s to watch’ there is vast quantities of wealth being generated from Angola,” Camilla adds. “Typically, Angolans have tended to buy in Portugal due to the fact the language is the same. However, we predict that it will only be a matter of time before Angolans start to diversity and look to London property. As markets mature and clients look for other ways to spread and diversify their wealth, London eventually ends up on their radar.”

Low-end prime London rentals down, while three-beds are in high demand

As the lettings market in London continues to thrive, a leading national estate agent reports a strong demand in the more expensive end of the rentals market, as well as a shortage three-bedroom homes.

Owning a three-bedroom property is good news for landlords in London in 2014. They make a safe investment thanks to having such broad appeal – prospective tenants include young couples, small families and older couples looking to downsize. At a time when there has been a surge in working from home, having a spare room to use as an office is also very attractive to tenants.

“The demand for three-bedroom homes for rent in central London is seemingly insatiable,” said Zoe Rose, Head of London Lettings at Strutt & Parker at the end of October. “As soon as we get a good one on our books, it lets in a flash. We recently let a three-bedroom lateral top floor apartment on Cranley Gardens in South Kensington for £1,300 per week within two days on its first viewing – and similarly we let a three-bedroom apartment on Ladbroke Gardens within one week for its asking price of £1,500 per week.”

Meanwhile, Strutt & Parker’s latest figures for lettings transactions in the third quarter of 2014 indicate that it’s the larger, more expensive properties that are performing most strongly. When compared to the same period last year, transactions are up 18.4 per cent for properties between £2,000-£2,999 per week, up 14 per cent for properties between £3,000-£3,999 per week and up 16.7 per cent for properties over £4,000+ per week.

However, lower priced properties costing less than £999 per week to rent, were down 7.5 per cent on last year – and properties between £1,000 and £1,999 per week were also down very slightly by 1.4 per cent.

Zoe Rose predicts that 2015 will be a good year for landlords with property in prime central London: “We are anticipating a slight uptick in lettings prices in prime central London for 2015 – a 2.5 per cent increase; and we’ve already seen two per cent growth for lettings in 2014. This slow but steady growth will be underpinned by the simple fact that there are still so many people out there that can’t afford to buy a home in London and these people will continue to rent. Not to mention the large number of people who enjoy the flexibility of renting – global, nomadic types who we refer to as ‘Glomads’. The threat of rising interest rates rising will also play an important contributing factor.”