Russians lead demand for prime property in London with Cherie & Co. client numbers increasing by 300% in the last 2 months!!!
Demand from Russian buyers is pushing up the price of prime property in central London, according to a new report. Prices increased by 1.4% in May, the 14th consecutive monthly rise and are now 23% higher than they were at their lowest point in March last year, but prices are still 6.4% below the market peak of March 2008 market peak. The second half of 2010 has seen many Russian families, individuals, funds and third party referrals (Solicitors, friends, family etc.) hiring “buying agents” to source prime central London homes.
Reports show that price growth in Chelsea, Kensington, Notting Hill and Knightsbridge has led the market over the past 12 months, but now Mayfair, Kensington and Knightsbridge are rising strongly with price growth of 14% across these locations over the last six months. This has led to many buyers confused and in need of advice on potential acquisitions.
Our client base also shows that it is overseas buyers who are leading the market with the number of buyers from Russia having jumped by 300% in the last two months. Despite this we are still advising our buying clients not to fall into the trap of bidding over the asking price or bidding at 2008 levels. This advise has proved beneficial to clients who we have successfully purchased properties for over the last few months. However, quality properties are still achieving top prices and in some rare cases at March 2008 levels. One of the most popular questions we get asked “ What do you think this property is worth and what amount should I offer?”
‘The London residential market is continuing to lead the wider UK market. The weak pound is having the effect of pulling in demand from overseas buyers, who view London as offering good value, with prices still 34% lower in dollar terms from the 2008 peak,’ said Cherie Matthews of Cherie & Co.
‘Russian buyers have become very noticeable over the past two months and have bucked the trend set by domestic buyers who became less committed in the run up to the election. Russians and most other nationalities buying in London are fairly unaffected by political upheaval and have remained by far the most confident and proactive buyers in the market,’ he explained.
He said there is no doubt that the current global financial market upheaval has unsettled buyers and sellers and proposed changes to capital gains tax have also unsettled some sellers in particular, and there has been a sharp uplift in prospective vendors looking to test the market. ‘Our data reveals a growth of in requests for advice and valuations, and many have turned into instructions however this is not yet turning into hard instructions to sell,’ Bailey revealed.
But there is growing evidence in the wider UK market that residential sales volumes and even prices are coming under pressure. ‘London will not escape this entirely over the next few months however, the impact of strong and resilient demand from overseas will support the market,’ added Cherie.
Recent uncertainty in the Euro Zone has strengthened the Rouble and encouraged buyers, according to Jan Tynan-Parker, Head of Cherie & Co.’s client relations. ‘Buyers from Russia and the CIS states have increased their interest in London’s luxury market on the back of recent events in the Euro zone which has prompted the strengthening of the Rouble against the pound. The ongoing recovery in prime London prices has also created additional interest in London as buyers now believe that the market is likely to continue to strengthen,’ she explained.
‘I can see a clear shift in demand towards single house refurbishments and even larger development opportunities where Russians can be investors or co-developers. Increasingly they are looking to add value over the longer term, which proves that Russian buyers consider London property a safe and attractive investment,’ she added.