Overseas buyers drive London prime resi

The prime London new-build residential market is now driven almost exclusively by international buyers, generating £1.4bn inflow of equity last year.

According to Savills, almost two-thirds of buyers of prime London new build homes were international last year. In contrast, international buyers accounted for just one-quarter of the prime London new-build residential market in 2009.

At the top end of the market, international buyers were responsible for 88% of all new-build sales in the prime central area worth over £5m.

Overseas buyers in the new-build sector are dominated by Pacific Asians and Chinese. They accounted for 33% of buyers in 2011 and 37% in 2010, compared with 4% in 2009.

Buyers from Hong Kong, China, Singapore and Malaysia dominate the apartment market at lower price points than most other overseas buyers.

Buyers from Russia and other Commonwealth of Independent States, the Middle East and North Africa are more likely to buy new-build homes worth £5m and more in prime central areas.

In prime London's secondhand markets, UK buyers accounted for 66% of transactions last year. Over the past five years, less than 37% of secondhand sales over £5m went to domestic buyers.

Yolanda Barnes, head of Savills research, said: "Everybody will be watching to see what happens if and when mainland Chinese money is freed from current 'export' constraints. We stand by our forecasts that if it were to flow into our markets at the rate at which new Chinese billionaires are being created, it could boost prime central London values, particularly those within the new build sector, substantially."