Foreign buyers prop up London property values

FOREIGN buyers are helping push up house prices in the most affluent areas of central London, according to fresh research.

While the value of prime homes in London has fallen one per cent since July, overseas buyers have buoyed prices in areas like Kensington and Chelsea, says agent Knight Frank.

Foreign buyers made up 68 per cent of all sales in June, compared to 53 per cent last year, with even more new overseas homeowners at the top end of the market.

While European demand has been quiet in recent months, demand from Asia, Russia and the Middle East has remained strong.

“The weakness of the pound ensures that effective discounts available to foreign buyers are still very significant,” said Liam Bailey, research director at Knight Frank. “Surveys over the summer found that seven in ten London homes priced at over £5m are going to foreign investors.”

The top 25 per cent of homes in London have gained 12 per cent in value in the year to the end of October, thanks to strong growth at the start of the year. However, prices fell 0.23 per cent last month, the fourth consecutive monthly fall in the capital.