By Melissa York and Emanuele Midolo
Whilst the overseas buyers are away, this year might just be the perfect time for UK to buy a central London flat – without the competition.
The absence of international buyers from prime central London has created a rare window of opportunity in the capital’s flat market — and at Black Brick Property Solutions, we have been tracking this shift closely and advising clients on how to capitalise on it.
The numbers tell a clear story. Property prices in Canary Wharf rose just 0.4 per cent last year, while flats across prime central London neighbourhoods including Mayfair, Knightsbridge and Belgravia have seen significant price reductions. One-bedroom flats in Mayfair reduced by £75,000, two-bedroom period flats in Knightsbridge down £55,000, and properties on Sloane Street reduced by £50,000 are emblematic of a market where supply has outpaced demand in the absence of the international buyers who would ordinarily be competing for these homes.
The reasons for this are well documented: coronavirus travel restrictions, successive Asian lockdowns and the economic and political uncertainty triggered by Russia’s invasion of Ukraine have all suppressed overseas buyer activity. Middle Eastern buyers accounted for just 7 per cent of central London transactions last year, down from 11 per cent in 2019. Asian buyers — historically dominant in high-rise new-build hotspots such as Nine Elms, Vauxhall and Kennington — have been similarly absent, with property values in those areas falling 1.5 per cent last year.
On the prospect of Middle Eastern buyers returning to the market, I offered a candid assessment of the factors at play:
“I think we will see a lot of Middle Eastern buyers coming back after Ramadan. Maybe there is hesitation. What could be putting them off? Boris Johnson! There is potential for political turbulence looming . . .” – Camilla Dell, Managing Partner, Black Brick Property Solutions
The one international buyer group that has remained active is Americans, buoyed by dollar strength. Analysis from JLL shows that while sterling buyers are paying 76 per cent more for a new-build home than a decade ago, dollar buyers are paying just 53 per cent more — a meaningful currency advantage that has kept US demand relatively robust, particularly for quintessentially British period properties.
In the meantime, the vacuum left by international buyers has been filled domestically. First-time buyers have emerged as the dominant purchasing group in areas like Canary Wharf, attracted by the relative affordability of flats compared to renting, while City workers returning from pandemic-era country relocation are acquiring pieds-à-terre in prime central London. Knight Frank anticipates that international purchases will not return to pre-pandemic levels in central London until next year — and when they do, prices could increase by as much as 6 per cent.
At Black Brick, our view is clear: for buyers considering prime central London flats, the current market represents a compelling and time-limited opportunity. When international demand normalises, this window will close quickly.
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