Foreign investors looking to take advantage of the weak pound will push up the prices of luxury real estate in central London by 8 per cent this year. Thatââ¬â¢s the conclusion of new research from the international property firm Savills who reported that the average price of luxury homes costing at least ã3 million rose by 9.6 per cent over the last year.
Foreign buyers pushing up prices of luxury homes
Foreign buyers are snapping up luxury overseas property in Belgravia and Knightsbridge and have pushed prices up by 3.4 per cent in the last quarter. Lucian Cook from Savills admitted that ââ¬Ëoverseas demand has been much stronger than we expectedââ¬â¢.
Part of this demand comes from rich individuals seeking a haven for their wealth amidst political and economic uncertainty in their home country. Sterling has also fallen in value by around a quarter against a basket of other currencies since late 2007, making property in London more attractive.
Savills new report reverses their forecast from November 2010 where they estimated that prices for luxury homes in London would fall by 1 per cent as supply began to exceed demand.
Overseas buyers account for almost three in four luxury home purchases
Further research from Hamptons International has found that foreign buyers accounted for almost three quarters (72 per cent) of prime central London property purchases in the first three months of 2011 compared to just 60 per cent in the same period in 2008.
Savills estimates that the prices of luxury homes valued at least 1 million pounds across London will rise by 6 percent this year. Yolande Barnes, head of residential research at Savills, said: ââ¬ÅDisplaced wealth is pushing up values beyond the centre. We would normally expect this to trigger a ripple of domestic wealth out of the capital, but this is only so far being seen in a few key commuter hotspots.ââ¬Â
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