Property buying agency Black Brick has seen double the number of new enquiries in August and September 2018, compared with the same period in 2017.
The new enquiries were spread across nine different nationalities including the USA (24 per cent), UK (34 per cent), Saudi Arabia, UAE, Canada, Japan, India, Egypt and Germany (all 6 per cent each).
When comparing this with the previous year, enquiries from the USA came in at 20 per cent, whilst the UK was at 0 per cent, demonstrating a shift from domestic buyers in the last 12 months.
Camilla Dell, Managing Partner at Black Brick, says: “We are seeing a surge from UK buyers at the moment, mainly clients looking for homes. This is because UK-based buyers are often more able to take a view on the twists and turns of the Brexit negotiations; for most of them, their future is in the UK regardless of Brexit or who is sitting in Number 10.
“The remaining enquiries came from overseas with the USA being the highest and those from the Middle East remaining an important market for the buying agency. We will always see international investment from overseas buyers, particularly in the super prime London property market as they are not as impacted by proposed additional taxes. However, should the proposed additional stamp duty tax on foreign buyers it come into force, it will certainly impact overseas investment in the short to medium term, and possibly dissuade some wealthy buyers from spending well above GBP1 million which, in turn will reduce the tax take, and possibly reduce development in London, as many developers rely on selling apartments off plan to foreigners in order to fund their developments in the first place. However history has shown that when stamp duty increases, its normally absorbed into pricing, and we expect the same to be true again, with the prime Central London market decreasing in line with whatever rises may come.”
Black Brick has also reported that North American buyers are showing greater interest in the UK. So far in 2018, 34 per cent of enquiries have come from US and Canadian prospective purchasers, compared with one in five in 2017.
Del adds: “US based buyers have shown considerable interest in investing in London and this is something which has remained consistent over the last 18-24 months. We believe the demand from this nationality is coming from buyers who are taking advantage of the weak pound against the US dollar, from those with interests in the tech sector and other business links to the UK and lastly some US buyers are nervous about Trump and are diversifying outside of the US.”
Taken from the peak of the London housing market, in late 2014, sterling has fallen 19.25 per cent. Combine that with a drop in property prices of 15-20 per cent, and dollar buyers today are able to make acquisitions for almost 40 per cent less than four years ago. “Add to this the recent rally in the oil price, which has almost trebled from its low in early 2016, and there are good reasons why buyers are starting to return to Prime Central London,” adds Dell.
Black Brick is predicting that London is now seeing a ‘bottoming out’ of prices across prime central London and this is reflected in the surge in enquiries over the summer period. The buying agency believes that Brexit has been likely overstated and that pent-up-demand, when it is finally released, will trigger a scramble for attractive properties. Camilla added: “People like certainty and once Brexit is triggered, whether it’s a deal or no deal, it will bring certainty back to the market, which in turn will have a positive impact on the London property market.
