There has been strong demand from foreign buyers in the UK property market, and there has recently been especially strong interest for family flats and houses in London.
The UK capital is traditionally the top choice for foreign buyers and has been a major global investment hotspot for some time now. And recently, international investors have been boosting demand in the prime market.
Recent market analysis from Benham and Reeves has revealed buyer appetite for family homes in particular among foreign buyers is helping drive the prime market in London.
The London estate agent also looked at which types of homes are most in demand. The average price paid for a three-bed-plus flat is up by 1.4%, and four-bedroom houses have climbed by 3.7%. This research suggests that strong demand remains from buyers in search of properties suitable for families.
Foreign buyers looking for family homes
For buyers or investors in search of a four-bedroom house in prime London, Vauxhall, Nine Elms, Kensington and Borough offer the most affordable price tags. And for those looking for a flat with three bedrooms or more, Docklands and Canary Wharf provide the most affordable foot on the property ladder there.
Director of Benham and Reeves, Marc von Grundherr, commented: “Our previous research has shown that following the end of pandemic travel restrictions, the number of foreign buyers entering the London market has climbed.
“Many of them are relocating their entire families in the process and this increased demand has no doubt been a contributing factor to the strong price performance of family suitable homes within the prime London market.
Given the allure that London has to overseas buyers, particularly those who will be educating their children in London, we don’t expect this trend to slow any time soon, and family-friendly homes in London’s prime markets will continue to be hot property, rising in value as a result.”
Currency exchange rate
Benham and Reeves have also said they’ve seen demand from overseas buyers and investors grow throughout the year, boosted by the continuing weakness of the pound.
One very important factor that has been attracting foreign buyers to the UK is the exchange rate. The pound has remained relatively weak, especially when compared to the US dollar, which is why US investors in particular have been one of the most prominent overseas investors in the UK.
This contributes to a relative price cut for any property investment made in the country, and this will also maximise an investor’s returns compared with buying property domestically. It has even meant double-digit discounts in the past.
On top of that, this provides an opportunity for long-term diversification, especially as UK bricks and mortar has long been seen as a secure investment option. And as the pound is tipped to rise later in 2024, this could lead to more foreign buyers snapping up UK property quickly.
Positive economic signs
The UK property market has remained robust even throughout substantial economic ups and downs. This has helped give many people, particularly overseas investors, ongoing confidence in this investment location.
There has recently been positive signs surrounding the UK economy, which has also boosted confidence in the property market among foreign buyers. Optimism appears to be higher about the UK economy and in terms of investor confidence.
This is happening as the annual rate of inflation has dropped to its lowest level in more than two years. The Bank of England has kept the base interest rate at 5.25% for the third consecutive time.
In recent months, mortgage rates in the UK have been heading in a more promising direction for borrowers. And the base rate is expected to drop next year, which will also be good news for foreign buyers using a mortgage to purchase property.
BuyAssociation has offices in London and Manchester and is experienced in connecting foreign buyers and investors with UK property investment opportunities. Get in touch for more information.
