Prime in the context of London

Headlines would have us believing London's housing markets are being overrun by the globe's super-rich, but this is far from the truth.

2 July 2014, words by Sophie Chick

 

Listening to some commentators, you would be forgiven for believing that up to 80% of London’s housing stock is currently being purchased by overseas absentee and ‘buy-to-leave’ landlords. This is far from the truth.

Our estimate is that only 7% of Greater London properties for sale were bought by purchasers from overseas in 2013-14. Most of these will be buying with the express intention of letting the property – so the majority of this stock will be occupied by Londoners.

Why then are the headlines so different from reality? The main reason is that data like ours only relates to markets that are particularly international in nature. Prime central London (PCL) and new build markets are especially international but are only tiny parts of the overall London market. Prime London as a whole comprises only 8% of the total market. Figures for PCL new build properties are simply not applicable to the market in general.

Also relevant is the fact that what is being measured is not foreign purchase but for the most part purchases by Londoners who happen to have overseas origins. Being such a cosmopolitan city, this is inevitably a high proportion of buyers but they are buying homes to live in; 88% of prime buyers are from the UK or are from overseas 
but buying their main residence.

A lot of the confusion around overseas purchase arises from the high levels of foreign buyer activity seen in specific, very small, sectors of the London market. Ultra prime new build developments comprising a few dozen units are no indicator of the broader London market in this regard.

Map 1 shows the prime markets that we measure in this publication set against all private stock in Greater London, account for just 8% of the total.

Click the below image to enlarge

Map1

Even in the more domestic prime markets of South West London and prime North, buyer profiles are more in line with the Greater London average. It is only prime North West, PCL and prime East where overseas buyer proportions are higher. Together these comprise 3.8% of Greater London private housing stock.

Click the below images to enlarge

Graph 1.1
Graph 1.2
Graph 1.3

 

 
 

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Yolande Barnes

Yolande Barnes

Director
World Research

Savills Margaret Street

+44 (0) 20 7409 8899

 

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