Half of prime London new builds in 2023 went to foreign investors - agency

Strutt & Parker’s London New Homes staff attribute 50 per cent of their market this year as dollar-based - 30 per cent from the US and the rest from the Middle East.

They say the success of new build schemes this year is not only down to favourable currency rates but also to the high-quality product  that more closely echoes the traditional US models with a firm focus on service offering and amenity provision.

Victoria Allner, director in the Private Client & International Department at Strutt & Parker/BNP Paribas Real Estate, says: “Prime Central London continues to be an attractive marketplace for international buyers. 

“While premium values have barely shifted over the past year thanks to the market’s discretionary nature, those buying with dollar-based currencies, such as the US, Middle East and Asia have been able to capitalise on a weak pound and have made their own savings. 

“This all started at the end of September 2022 with the pound dropping to record lows coupled with anticipated increases in PCL values over the next five years. This combination fuelled international investment into London’s prime real estate, a trend which has continued over the last year dominated by cash buyers or those with access to more attractive lending.

“Those buying in cash, and maximising currency play effectively benefitted from a ‘double discount’, unencumbered by competing buyers in the market this year. Despite achieving discounts while transactions have remained at relatively low levels, values in PCL have been underpinned more broadly.

“The budget of a UHNW Middle East based buyer who I worked with earlier this year had effectively increased by 25 per cent, while many adopted a ‘buy now and leverage later’ approach to maximise their discount window.”

Strutt & Parker forecasts Prime Central London house price growth of up to 10 per cent over the next five years, and with current values still beneath the 2014 peak, the present market provides a ripe opportunity for investment.