American investment in London property is at an all time high due to the fall in sterling. But what are they buying and where?

 
Melissa York
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Earlier this week, US citizens all over the world were celebrating Independence Day, yet for the first time in a long time, many of them had one eye on the fireworks and another across the Atlantic on the bargains to be had back in the Old Country.

Following the fall in the pound due to the Brexit vote and the subsequent ‘flash crash’, London property has never been cheaper for purchasers buying in US dollars.

Rightmove says there’s been a 1.9 per cent drop in prime London house prices in the last 12 months, interest rates have stayed low and all this, combined with what West London-based estate agency Kay & Co calls ‘the Trump effect’, has led to an increase in demand from the USA.

“We have received a 30 per cent increase in sales from US buyers in the last 12 months,” says managing director Martin Bikhit. “Exchanging US dollars to British pounds is saving US buyers thousands of pounds and in many cases, cancels out the cost of stamp duty.

“Americans tend to favour the ‘tried and tested’ areas, which are known globally, such as South Kensington and Notting Hill. It may sound far-fetched but many Americans are familiar with Notting Hill because of the Richard Curtis film. It’s often one of the first places they cite when it comes to discussing living in London.”

“Originating mainly from the east coast of the USA, our clients are seeking a bolthole or investment in areas such as stylish Marylebone, and properties in Bayswater overlooking Hyde Park, which is akin to Central Park in New York.”

Matthew Turner, CEO of buying agency Astute Property Search, says he’s recently sold a £885,000 two bedroom flat in Belsize Park to a Seattle family, who plan to used economic uncertainty as an opportunity to leverage the favourable exchange rate.

“Properties valued around £1-1.5m remain a popular investment choice. Overseas buyers are paying around 15 per cent less for a property in London than a year ago meaning that now is the perfect time to invest.”

So if you’re an Anglophile Yankee, you’d be crazy not to buy in London right now. But which areas are American buyers eyeing up?

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According to figures from the Office of National Statistics (rounded to the nearest 1,000) Westminster tops the league for US citizens living in London with roughly 7,000 of them residing in the borough. Southwark, Kensington and Chelsea and Camden all come in joint second place with around 5,000 residents from the USA each.

But a lot hinges on how long they intend to stay, whether they have a family and what they’re here for. Most relocations in financial services and law tend to be based in Canary Wharf or the City, for example, so businesses will look to secure corporate relocations for employees in these industries in the east. Irina Keen, global account manager at National Corporate Housing – a US temporary accommodation specialist that handles lots of these arrangements – says her clients often simply look to the neighbourhoods they’ve heard of.

“Americans tend to favour the ‘tried and tested’ areas, which are known globally, such as South Kensington and Notting Hill. It may sound far-fetched but many Americans are familiar with Notting Hill because of the Richard Curtis film. It’s often one of the first places they cite when it comes to discussing living in London.”

“People said to me, why would we have that product here when everyone wants to get on the housing ladder? As an American, we see housing as somewhere to live, I don’t necessarily see it as a form of investment.”

It’s also worth noting the important role American institutions play in the desirability of certain areas. Vanessa Hale, a partner in estate agent Strutt & Parker’s research department and herself an ex-pat, lives in West Hampstead with her husband, which is popular along with St John’s Wood and Maida Vale for its proximity to The American School in London. Outside of the capital, The American School in England in Thorpe, Surrey, draws US buyers as much as quintessentially English cathedral cities like Oxford and Cambridge.


The Southwestern Apartments, a 'multi-family' style build to rent development by Greystar in Dallas, Texas

Unlike European buyers, Americans seem to have more of an appreciation for our wonky, characterful period houses, even if they are shocked by the lack of space. “Adjusting to not having a basement, utility room and garage can be difficult because of the lack of storage,” says Hale.

“Parking is also a big thing. Practically everyone in the US has some form of parking so the typical parking permits and crowded streets of central London will take some getting used to. Americans will also seek air conditioning.”

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And many won’t be looking to buy at all, which is diversifying the capital’s rental stock. When Michela Hancock moved to London with her partner four years ago, she was surprised to find that serviced, ‘multi-family’ rental blocks, stuffed with amenities, were pretty much non-existent. “People said to me, why would we have that product here when everyone wants to get on the housing ladder? As an American, we see housing as somewhere to live, I don’t necessarily see it as a form of investment.”

She works as a senior development director at Greystar, a US real estate company bringing similar build-to-rent homes to the UK. As well as reaching out to the corporate relocators, it’s also acquired a site formerly owned by the Royal Mail opposite the new US Embassy in Nine Elms, where it’ll build 900 new homes for private rent. Management and maintenance services are based on site, along with a number of services like restaurants, co-working spaces and fitness equipment.

“Renting can be a lifestyle. If you’re new coming into the market like I was, I just wanted a good quality place to rent that had amenities and services. Americans also like to travel to Europe when they’re not working so they want to be able to just leave their homes and know they’re being taken care of.”

In an uncertain moment for the housing market, it’s good to know our friends Stateside are still investing in prime central London. God bless Americans.

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