Still, given the reduction in overall transactions last year, the absolute number of homes bought by international buyers was likely down on an annual basis, Hamptons said.
Rising borrowing costs, economic uncertainty and the worst cost-of-living crisis in a generation have driven a slowdown in overall UK house sales. Demand is still being affected in advance of a general election likely to take place this year.
At the top end of the market, domestic buyers’ reluctance was shared with Middle Eastern and American purchasers, who flocked to London in 2022 to capitalise on a weak pound but are now feeling the pain of an appreciating currency.
US buyers dropped to 2 per cent of all purchases from 7 per cent a year earlier.
But a surge in buyers from Asia — driven by easing COVID-19 travel restrictions and a more generous visa program for Hong Kong residents — boosted the share of overseas deals in London.
By contrast, the market in Hong Kong — under pressure from political uncertainty — is likely to see an increase in distressed sales this year as vendors look elsewhere, according to a report by broker Savills Plc.
Solina Chau, co-founder of Hong Kong billionaire Li Ka-shing’s venture arm, bought a luxury flat next to Green Park for £20.5 million ($40 million) in August — one of the capital’s biggest apartment deals of 2023.
Xu Xiaoping, one of China’s most successful angel investors, bought a £38.6 million property nestled between Green Park and Berkeley Square a few months earlier.
EU buyers also indulged in the city’s real estate, with the bloc’s share of prime central London purchases rising to 18 per cent from 12 per cent in the previous year — marking a recovery to pre-Brexit levels.
Nina Flohr, daughter of Swiss businessman Thomas Flohr, bought a terraced house in the affluent Knightsbridge neighbourhood for more than £30 million in February last year.
“It’s likely that 2023 probably marks the new normal for the share of homes bought by international buyers,” Ms Beveridge said.
“Deeper economic and political uncertainty in parts of Asia and the Middle East combined with a brighter outlook for London’s property market might tempt more investors from these parts of the world.”
Still, a wave of elections due to take place in almost 70 countries in 2024 may restrict prime residential home values in major cities, according to Savills, which could point to reduced demand from international buyers.
The biggest concerns for the rich looking to buy UK property include stamp duty, higher scrutiny into finances and the potential for a Labour Party government at the next election, according to research published in November by Beauchamp Estates.
However, Jo Eccles, managing director at London buying agency Eccord, said Shadow Chancellor of the Exchequer Rachel Reeves’ commitment to rule out a mansion tax last year should ease concerns.
“This time round the main political parties are more centrally aligned,” Eccles said. “Whatever the outcome, buyers aren’t expecting any major property-related policy changes in either direction.”
Bloomberg
Bloomberg
