House prices up 50% in capital hot spots in just three years as super-rich foreigners buy sought-after properties
House prices in some of London’s most sought after locations have risen by more than 50 per cent over the past three years, with super-rich foreigners behind the most expensive purchases in the capital, new research has revealed.
While property prices across the rest of Britain continue to stagnate and fall because of the economic recession, exclusive boroughs in the capital are bucking the national trend thanks to billions of investment from wealthy overseas buyers.
Prices are now, on average, 16.5 per cent higher than before the financial crash three years ago.
Demand for premium property, defined as the top five per cent of the market by value, from rich Russian, Indian and American investors, is behind the rises, estate agents say.
Research from Knight Frank has revealed that London’s property market outperformed the likes of New York and Paris, with only Jakarta, Hong Kong and Beijing showing faster rising premium house prices since 2009.
Liam Bailey, global head of residential research at the estate agency, said wealthy foreign buyers accounted for more than half - 51 per cent - of all £1million plus home sales in London over the past two years, rising to 60 per cent for properties priced above £5million.
Rich Russians made up 6.6 per cent of all ‘prime’ sales in the capital, followed by Indians, Americans and French, Mr Bailey added.
‘London’s reputation as a global financial centre, its political stability and transparency, as well as its lifestyle benefits ensure it remains a popular choice for the globetrotting elite,’ he said.
‘The crisis in the Eurozone has only served to boost interest in the city among Europeans with buyers from Italy and France the most active Europeans in the market in 2012.
‘Sales to Russians, US and Indian buyers remain the most prevalent, however. Between them they made up over 15 per cent of all sales last year.’ South Kensington, where the average house price tops £1million, drew the largest number of international buyers, with a staggering 76.5 per cent of all property in the area bought by foreigners last year.
The suburb is seen as a ‘safe haven’ for investors, with house prices quadrupling in the borough over the past 15 years.
Other expensive areas, such as Knightsbridge, Hyde Park and Belgravia were also popular.
One Hyde Park, in Knightsbridge, holds the record for the most expensive property in the capital after it sold for a staggering £140million - 870 times the current British average house price of £161,000 - in late 2010.
The six-bedroom flat covers two floors and boasts views across the Serpentine. It was bought by Ukrainian billionaire Rinat Akhmetov, who is estimated to have built up a £10billion fortune thanks to his investments in steel and coal.