31 Oct

From Russia with love for luxury property

From Russia with love for luxury property

It appears that the continued strength of high-end, luxury property within the UK is being propped up heavily by foreign investment – a good sign that the market is attractive to all manner of investors. 

A recent study carried out by aircraft manufacturer Hawker Beechcraft Corporation (HBC) showed that over half of luxury property sales within London were carried out by foreign investors and property owners. The data showed that Russian nationals topped the table, acquiring 266 million pound-plus homes in the capital, spending a staggering £429 million in the process.

UK nationals purchased a total of 2,183 of the 4,510 homes sold within that specific price bracket during 2010, according to the data. The market is currently performing very well, especially in comparison with the regular property market. Lloyds TSB recently reported that the sales of homes worth at least £1 million reached their highest point since the market peaked during 2007.

Such impressive levels have been put down to a string of wealthy investors and buyers coupled with a healthy demand both abroad and overseas by HBC. It is arguably no coincidence that London’s commercial property market is enjoying similar good fortune at this moment in time and it appears that both are flying currently in the face of economic uncertainty.

Sean McGeough, HBC president, Europe, Middle East and Africa, said: “As one of the most desirable cities in the world, it's no surprise that London's property market is attracting a large number of overseas buyers.”

The data, which is based partly based on Land Registry data, found that Russian investment in properties worth at least £1 million amounted to a total of £428,740,103 – coming in at second place in the list. The UK topped the list with 2,183 such properties totalling £3,517,122,197 in investment while UAE’s investors acquired 198 properties bringing them in at third with £319,738,382.

The remainder of the list was taken up by (in order) the US, Singapore and France (joint), India, Hong Kong and Italy (joint) and finally China. The data shows that there is clearly an interest from Russia to invest large amounts of capital into UK property while there is also strong home-grown interest too.

If that foreign interest can continue alongside domestic awareness of the market then the luxury property sector looks to set to continue to flourish. While it may not affect the ordinary man on the street, the filter effect could be felt further down the property tree if such levels of finance continue to be introduced to the market.

This is also proven within the same research by HBC. It found that the number of business flights coming into London has increased as a direct result of the increased investment. This, according to HBC, is because many of the investors are wealthy, busy individual who can afford such flights regularly, this is just one example of how the investment can have a knock-on effect for the economy.

HBC found the number of business flights to Biggin Hill, London City and Farnborough increased by 46 per cent, 38 per cent and 34 per cent respectively between the months of January and September.

''Given that many of these individuals lead busy lives and often travel a huge amount, this helps explain the rise in flights to London's business airports,” said Mr McGeough.

At a time when many international markets are struggling due to the euro zone crisis, global downturn and general financial gloom it will please both investors and owners within the market to see that there is a definite interest from investors, aside from those within the country.

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