Buyers from Russia have moved from the first position at the London property market to the respectable third one. The Italians and French have unexpectedly become its frontrunners.
These were the Russians who last year often bought houses and apartments in the best areas of the British capital. According to the ee24.ru referring to Bloomberg, in the last seven months, period from January to July, the leaders began ones coming from Italy. The second place is occupied by France and Russian buyers moved to the third position.
In 2014 the Italians purchased real estate in the best districts of London. Their overall share at the real estate market counted 6.7%. French "contribution" to this year was 4.1%. In general, representatives of the European Union are purchasing more often different housing for different prices. Their combined share at the London market was 14.5%. Planck indicator of demand from European buyers has not risen so high since 2011.
Russia, as it has mentioned above, takes the 3rd place. The United Arab Emirates are behind keeping, the trend of the previous year. This situation is somehow contrary to the forecasts, made by the analyst. In 2013 the Russians have invested about 180 million pounds in the London housing market, according to Savills, and in 2014 this amount is expected to raise in four times (forecast of JLL). According to analysts, the Russians will invest their savings in housing in countries with a stable economy and foreign policy, in particular in the UK.
Strictly speaking, according to JLL the amount of investment has really increased. For example, Russians have invested about 336 million pounds in commercial real estate in the first half of 2014, which is twice more than overall figure of 2013. However, the reason for the leadership change in the whole market lies in enhancing the activity of buyers from other countries – Italy and France in particular.
It is interesting that Italy ranks firs despite of the difficulties in economic situation. In the spring, the country experienced another economic downturn, the third in the last few years. And the Italians don’t prefer the cheap real estate options, choosing the areas of Chelsea, South Kensington and Knightsbridge. In 2014 they spent about €5.53m (£4.4m) on the London housing.
It’s hard to say what exactly caused the development of such a situation. According to analysts, Europeans purchase homes and apartments not for personal use but for their subsequent lease. The British themselves, coming to London for work or school, prefer to rent apartment instead of buying them. This makes a very profitable acquisition to become an investment. In addition, according to the employees from Goldman Sachs, the soft policy of the European Central Bank in respect of lending allows the residents of the euro area to freely invest large amounts in a variety of projects.
his point of view is supported by the fact that rental incomes from premium property in central London in July 2014 have increased for the first time, since the April 2011.
Text: Kyril Ozerov, ee24.com