Foreigners snap up premium homes


Housing market confidence growing

Four in every 10 London homes sold for more than £1 million last year were snapped up by foreign buyers, according to new research.

Russians, Indians and Italians were the biggest non-British buyers of the capital's seven-figure houses and flats in 2013, according to analysis by aviation firm Beechcraft Corporation.

The number of homes being sold for more than £1 million in Greater London rose to 6,145, up 20% on 2012.

The research claims 41% of them went to non-British buyers, who spent a combined £5.1 billion on properties.

"London is one of the most desirable cities in the world, and it is no surprise its prime property market is attracting so many buyers from outside of Britain," said Scott Plumb, Beechcraft's vice president of sales for Europe, Middle East and Africa.

The research, based on Land Registry figures, shows Russians spent more than £536 million on 264 million-pound homes in London last year. Indian buyers were not far behind, spending £449 million on 221 properties. Italian buyers were third on the list, spending £436 million on 215 properties.

Recent Land Registry figures showed that house prices in London increased at more than double the rate of the rest of the UK over last year.

London house prices leapt by 11.2% over 2013 to reach £403,792 on average, while prices across England and Wales generally lifted by 4.4% in the 12 months to December to reach £167,353.

Experts warned earlier this month that stronger curbs must be considered for the housing market amid fears that London is starting to show "bubble-like conditions".

By 2018, the average house price in London is expected to reach nearly £600,000 - some 3.5 times the average price in Northern Ireland and more than 3.3 times the average in the North East, according to a report from economic forecasting group EY ITEM Club.

The report said that while the rest of the UK is returning to normality, London's housing market is showing signs of "bubble-like conditions" and policy makers should be prepared to step in.

It said the Bank of England's Financial Policy Committee (FPC), which oversees stability, may need to consider imposing a formal limit on income multiples in relation to the size of the mortgage that someone wants to borrow.

The report came as a separate paper from think tank Civitas suggested that restrictions should be placed on overseas investment in London homes to help ease "rampant house price inflation" and the problem of younger people and families being "priced out" of the market.