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Properties in elite areas such as Kensington, where the average house price is £ 1,5 million, in recent years have been very popular among wealthy foreign buyers. As a rule, the clients were looking for an opportunity to invest in London - the world commercial center and the political stability city.
However, all that changed in 2015. As the real estate agents note, partly it was triggered by the turmoil in the emerging markets. On the other hand, the increased state duty, which means that buyers of expensive homes have to pay a much higher tax, played its role, too
Asian buyers accounted for 26% of all homebuyers in areas such as Kensington, Chelsea and Belgravia for the first three quarters of last year. Yet in 2015, their number decreased by 6% according to the data provided by publishing agency Hamptons to Financial Times.
Chinese buyers’ number has decreased from 9% to 3% of the total.
For the first three quarters of 2015, Russians accounted for only 1% of real estate buyers in the elite areas of London, which also includes Knightsbridge and Mayfair. Just compare this number with 7% in the same period last year.
This reduction in the number of buyers coincided with a period of unrest in the Chinese stock markets. The panic have spread to other emerging markets, and led to a depreciation of the currency against the pound sterling. For example, the RMB exchange rate fell by 6.6% from April.
As for Russians, then Ukraine and the conflict over international sanctions and falling oil prices have led to the difficult economic situation in the country. The ruble - pound sterling exchange rate fell by 25% from April and by 53% over the past two years.
-These groups neither sell nor buy, - said Charles McDowell, a real estate agent in Knightsbridge.
Fionnuala Earley, Head of residential real estate agency Hamptons, said: "If you look at what is happening in the global economy, this trend makes sense. However, something unexpected may happen and buyers will return."
She also said that there are some signs that the Asian property owners sell more homes in London respectively to the number of homes that are on the market.
Among other things, the market for expensive real estate UK suffered due to changes in taxation, which was introduced in December last year. As a result, for most buyers taxes were abolished. At the time, those who buy real estate at a price higher than £ 937 thousand, now have to pay increased taxes.
This includes a 10% fee on sale at a price in excess of £ 925 thousand, and 12% fee on sales worth more than £ 1,5 Mill.
The total number of real estate transactions in the elite areas of London fell by 19% in the first three quarters of 2015 compared to the same period last year, according to the company LonRes. The company’s agents associate the drop in sales with the tax rate increase.
UK residents made 42% of all buyers of this year against 36% last year, the agency Hamptons said. At the time, demand from citizens of EU countries remains very high.
source: ft.com
However, all that changed in 2015. As the real estate agents note, partly it was triggered by the turmoil in the emerging markets. On the other hand, the increased state duty, which means that buyers of expensive homes have to pay a much higher tax, played its role, too
Asian buyers accounted for 26% of all homebuyers in areas such as Kensington, Chelsea and Belgravia for the first three quarters of last year. Yet in 2015, their number decreased by 6% according to the data provided by publishing agency Hamptons to Financial Times.
Chinese buyers’ number has decreased from 9% to 3% of the total.
For the first three quarters of 2015, Russians accounted for only 1% of real estate buyers in the elite areas of London, which also includes Knightsbridge and Mayfair. Just compare this number with 7% in the same period last year.
This reduction in the number of buyers coincided with a period of unrest in the Chinese stock markets. The panic have spread to other emerging markets, and led to a depreciation of the currency against the pound sterling. For example, the RMB exchange rate fell by 6.6% from April.
As for Russians, then Ukraine and the conflict over international sanctions and falling oil prices have led to the difficult economic situation in the country. The ruble - pound sterling exchange rate fell by 25% from April and by 53% over the past two years.
-These groups neither sell nor buy, - said Charles McDowell, a real estate agent in Knightsbridge.
Fionnuala Earley, Head of residential real estate agency Hamptons, said: "If you look at what is happening in the global economy, this trend makes sense. However, something unexpected may happen and buyers will return."
She also said that there are some signs that the Asian property owners sell more homes in London respectively to the number of homes that are on the market.
Among other things, the market for expensive real estate UK suffered due to changes in taxation, which was introduced in December last year. As a result, for most buyers taxes were abolished. At the time, those who buy real estate at a price higher than £ 937 thousand, now have to pay increased taxes.
This includes a 10% fee on sale at a price in excess of £ 925 thousand, and 12% fee on sales worth more than £ 1,5 Mill.
The total number of real estate transactions in the elite areas of London fell by 19% in the first three quarters of 2015 compared to the same period last year, according to the company LonRes. The company’s agents associate the drop in sales with the tax rate increase.
UK residents made 42% of all buyers of this year against 36% last year, the agency Hamptons said. At the time, demand from citizens of EU countries remains very high.
source: ft.com
