The UK’s average property value has risen steeply in recent years, and overseas investors have been particularly active in the flourishing market.
Interest in the UK property market has remained strong during the first half of 2023 among foreign buyers, according to figures from lettings and estate agent Benham and Reeves, and this appetite seems set to continue despite ongoing economic pressures and rising interest rates.
Land Registry data puts the current average property value in the UK at £300,636. This means that, according to government figures showing properties owned by an overseas individual or company, the total property value of residential properties owned by overseas buyers is £84.2bn.
This is down slightly on research released by Benham and Reeves in May, which found that the total property value of all foreign-owned property was £90.7bn, which could be a result of property prices in certain areas – such as prime central London – decreasing.
And investors from Hong Kong remain the most prominent among all foreign nationals, with past research finding that they own around 13% of all UK homes owned by foreign nationals.
London dominates among foreign owners
In total, the research found that around 280,021 homes across England and Wales are registered with an overseas correspondence address or to an overseas company. Foreign ownership levels have increased by 3.4% over the past year, says Benham and Reeves.
The capital remains the most popular place for buyers overseas to invest, being the economic centre of the country as well as having a historically strong property market. That being said, other parts of the country have seen stronger performance in recent years, and some overseas investors are honing in elsewhere.
Of the total, a huge 103,425 properties in London are estimated to be foreign owned, and this equates to £55.2bn. The average property value in London is well above the national average, at £533,687, and prime central London – home to the most expensive properties – is particularly popular among foreign investors.
Total property value by borough
The research sets out the boroughs in London with the highest total property value owned by foreign investors, with the City of Westminster leading the way with around £14.9bn of foreign owned property.
This is followed by Kensington and Chelsea with £12bn, followed by Tower Hamlets (£4.8bn), Camden (£4.1bn), Wandsworth (£3.8bn), Hammersmith and Fulham (£3.3bn), Hounslow (£2.3bn), Lambeth (£2.3bn) and Islington (£2.4bn).
London boroughs make up all but one place in the top 10 list of foreign-owned property, with Buckinghamshire sitting in seventh position with a value of £3.2bn in overseas-owned homes. Average house prices in the county also sit well above the national average, boosting the total value.
Boosting the market
Director of Benham and Reeves, Marc von Grundherr, commented: “Foreign homeownership levels have climbed by 3.2% in the last year alone and the vast majority of this activity is individual buyers, rather than offshore entities.
“Certain nationalities, such as Hong Kongers, remain the most prominent and London also remains the go-to destination of choice. However, foreign homeowners from all corners of the world account for a significant proportion of market value up and down the nation.
“Despite the current economic landscape, this interest has remained strong so far in 2023 and we expect that foreign buyers will continue to bring a much-needed boost to an otherwise weary property market as the year progresses.
“It’s also important to note that a great deal of foreign interest comes by way of investment into the rental market and, with the Government failing to address the housing crisis by delivering much-needed housing stock, this investment provides vital homes for the nation’s tenants.”
BuyAssociation has offices in Manchester, London and Hong Kong, and is experienced in connecting overseas investors with UK property investment opportunities. Get in touch for more information.
