Brexit and Weak Pound change shape of overseas investment

Overseas buyers - likely in many cases to be investors - have taken a bigger stake in the wealthy enclave of Prime Central London.

Research by Hamptons lettings agency shows that international buyers purchased 39 per cent of homes sold in Prime Central London in 2022.

This is up from 35 per cent in 2021.  

However, the agency says foreign interest remains low compared to pre-Covid levels, when the share of homes bought by international buyers averaged 48 per cent between 2015 and 2019.

The biggest shift in 2022 came from American buyers. They bought seven per cent of homes sold in PCL in 2022, more than triple the share recorded in 2021.

This has predominantly been driven by the strength of the US dollar. Due to currency changes, a property costing £1m in 2021 would effectively cost a US buyer £900,000 in 2022, equating to a 10 per cent saving.

In response to the continued British National Overseas Visa programme, Hong Kong buyers have increased their share from two per cent in 2021 up to four per cent in 2022.  Given their currency is pegged to the dollar, they too have benefitted from currency savings.

However, Middle Eastern and European buyers remain scarce compared to pre-Covid.  

European nationals made up 12 per cent of PCL buyers in 2022, some five per cent fewer than in 2019.  Even so, they remain the biggest international buyer group.  

Meanwhile Middle Easterners bought seven per cent of homes in 2022, down from 10 per cent in 2019.

In Greater London as a whole domestic demand continued to dominate sales.

As a result, the share of homes bought by international buyers remained flat at 23 per cent in 2022 – the third joint lowest share on record.

Whilst remaining the biggest international buyer group, EU buyers fell for the third consecutive year.  

They made up nine per cent of buyers in 2022, down from 10 per cent in 2021 and 13 per cent in 2019. 

The last time this proportion was so low was in 2017, the year after the Brexit referendum.  

Middle Eastern buyers also dropped a percentage, purchasing two per cent of homes.

Conversely, two groups filled the gaps, each growing a percentage point with Hong Kong purchasers accounting for three per cent of purchases and Americans two per cent.

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.