Prices of prime central homes in London now stand at an average £800,000 (S$1.62 million), up nearly 40 percent since the credit crunch low in March 2009, attributed to non-UK buyers who see London as a safe haven.
With Singapore’s latest round of cooling measures, many overseas investors are shifting their investment focus to other markets such as London, as the weak pound attracts volumes of investors, who have contributed greatly to reviving the capital’s real estate market.
According to research by Knight Frank, the majority of buyers have acquired property as long-term investments rather than short-term capital growth plays. International investors, particularly from Singapore and Hong Kong, continue to be the dominant force that drive London property values up.
Meanwhile, the affordability gap in London is also growing, which means young Londoners cannot afford to buy their own property, forcing them to rent. This has led to a buy-to-let boom this year, attracting investors to purchase properties in strategic areas.
While the wider UK real estate market remains in the doldrums, London has been the shining light this year. The global property market will remain focused on London in the summer of 2012, which will reinforce its position as a leading powerhouse in the world economy.
“Our forecast for the prime central London market in 2012 is for positive price growth, but at a slower pace than we have seen over the past two years,” said Liam Bailey, Head of Residential Research at Knight Frank.
“We are expecting a rise of five percent across the whole of next year,” he added.
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