With the gradual lifting of COVID-19-related lockdown restrictions in the UK, Middle Eastern investors are flocking to London's prime residential market, according to Savills.
The UK market is seeing a “surge in activity,” Stan Ennor-Glynn, Head of International Residential Sales Middle East, said in a statement by the company.
“The relaxing of lockdown restrictions and office workers returning to the UK capital have resulted in an influx of Middle Eastern investment into London's prime residential market,” Ennor-Glynn explained. “As international travel is gradually reintroduced, we anticipate a more pronounced price increase in this market, which has been long overdue. We anticipate prices to end the year around 2% higher in 2021, with annual price growth reaching 8% by the end of 2022.”
In Q3, annual house prices in central London's prime residential market saw a growth of 1.4%, making it the second consecutive three-month period of growth.
LONDON'S PRIME RESIDENTIAL MARKET STILL TO SEE “FULL FORCE OF INTERNATIONAL DEMAND”
With increased demand for larger homes with gardens, prime locations such as Notting Hill, Bayswater, and Holland Park have seen growth in prices at 4.6%, 3.3% and 2.6% respectively.
Meanwhile, houses with six or more bedrooms have seen capital values go up 6.2% in the past year, while those with five bedrooms have gone up by 5%. Prices outside of central London have also increased by 2.7% on an annual basis.
Year-on-year capital values for two and three-bedroom properties in London's prime residential market have also shifted to positive growth rates, Lucian Cook, Head of Residential Research at Savills said.
“Throughout the pandemic, families searching for larger space and outdoor areas have been the driving force in the prime London market. These buyers have been encouraged by the low interest rate environment, which has masked the impact of the stamp duty holiday's phased withdrawal,” Cook continued.
The uptick in London's prime residential market comes as people begin returning to work or are considering returning to work, Cook said. Further, with London being a key investment destination for international buyers, the prime residential market is still to the “the full force of international demand return,” Cook added.
The UK has for long been one of the most attractive destinations for buying a home amongst Middle East investors. While London remains a key focus, other areas such as Glasgow, Cardiff, Bristol, Manchester, Edinburgh, Birmingham, and Leeds are also seeing interest from buyers from the region.
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