London property market bolstered by foreign demand throughout pandemic

Property Reporter
10th March 2022
Prime London 551

During an otherwise muted pandemic period when the capital largely trailed the rest of the UK where domestic market activity is concerned, foreign buyer demand and ownership has been keeping the London property market afloat, according to research from Benham and Reeves.

The latest analysis from the London lettings and estate agent looked at data on titles from the Land Registry registered to overseas buyers on London properties and how this level of foreign homeownership has changed, as well as the total estimated market value of foreign property purchases within the capital.

According to the research, there has been a 4% annual increase in the total number of London homes registered to overseas buyers, totalling 85,451 in 2021 versus 81,872 in 2020.

Hackney has seen the biggest increase in foreign property ownership, with a 15% increase in registrations to overseas individuals, followed by Greenwich (+10%), Lambeth (+8%) and Tower Hamlets (+8%).

Benham and Reeves then applied property market values over both timeframes to find the total worth of internationally registered homes, with the research estimating their total worth amounted to £59.3bn in 2021 - a £6bn increase on the initial pandemic year of 2020.

In terms of the highest sums of London property owned by foreign individuals, Westminster ranks top with an estimated £12.5bn in value in 2021, followed by Kensington and Chelsea (£9.7bn) and Camden/Tower Hamlets (£3.4bn).

Westminster has also seen the largest annual increase, with properties registered to foreign addresses accounting for £2bn more in value in 2021 versus 2020, with Camden again ranking high (+£565m), this time followed by Hammersmith and Fulham (+£556m).

In fact, just one borough has seen a drop in foreign activity and that’s Haringey, where overseas registrations dropped by -1% year on year, while the total value of these properties also fell by -£5m.

Marc von Grundherr, Director of Benham and Reeves, commented: “The spread of Covid-19 and the ongoing travel restrictions that were imposed understandably impacted the ability of foreign buyers to transact across the London market for the duration of 2020 and part of 2021.

"This undoubtedly contributed to a sluggish London performance when compared to the pandemic property market boom that took place elsewhere across the UK, but there’s also no denying that foreign demand has started to return to all corners of the capital and at some pace.

"Not only are transactions climbing, but the values being paid have also increased considerably, particularly across the prime London market, and this is a sure sign that the London market is on the up.

"Of course, there will be one segment of the international buyers that are sure to be absent for the immediate future, at least. However, what we’re sure to see is yet further proof that London is the destination of choice for global buyers of all shapes and sizes, not just those from a few select locations.”

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