Property Reporter: London property market fortified by British buyers
Thu 19 Nov 2015
According to the latest data from Marsh & Parsons, domestic buyers are on the rise in the capital.
During Q3, 79% of property purchases were made by domestic UK buyers, up from 75% a year ago. Salesactivity from domestic buyers has surged forwards to fill the gap left by overseas buyers and investors, who havebeen left more cautious by the strong sterling, stricter Government measures on non-domicile status, and heftierStamp Duty for higher value purchases.
As a result of this new hesitation, domestic mortgage buyers and first-time buyers have become more prominentin the London market, with the proportion of mortgage buyers in Prime London soaring from 53% in Q2 to 65% inQ3.
At the same time, overseas and foreign nationality buyers accounted for just over a fifth (21%) of all PrimeLondon property purchases during Q3 2015, which has fallen quarter-on-quarter, and is also down from 25% of allsales during the third quarter of 2014. This pattern is also being mirrored in Prime Central London, traditionally
favoured by overseas investors, with the proportion of foreign buyers standing at 32%, down from 34% in Q2 and37% a year ago. The investor share of the market has also dipped in Prime Central London over the past threemonths. Investors accounted for 35% of all Prime Central London sales during Q3, a considerable drop from 42%in Q2.
Yet with domestic buyers stemming this shortfall, overall demand for Prime London homes has grown in the threemonths to September 2015, and the number of registered buyers has climbed 4%.
Combined with a 5% drop in the supply of properties available on the market, and buyer competition is buildingas these trends diverge. There are currently 14 buyers for every available property for sale in London, increasingfrom 12 in Q2, and 10 at the end of 2014.
Peter Rollings , CEO of Marsh & Parsons, comments: The London property market has had to grit its teeth andbear the brunt of some rather trying taxation changes in recent months. At the high-end buyers are at the rockface of the new steeper stamp duty, and from overseas the strength of sterling, and government encroachmentson nom-dom status make investing in the London property market seem daunting. This has cast some shadowsover the capital, but the millions of Londoners who live and work in the city have acclimatised much more quicklyto the property taxation changes, and have risen up to fill the void left by overseas purchasers and investors.Were noticing longer purchase chains than ever as domestic buyers really start to dominate the market, anddemand is really putting a strain on supply. This should ensure that London houses prices and sales activitycontinue their ascent into 2016.
Prime London Property Price Movements
Property Price Quarterly ChangeAnnual change Two-year Change
Prime London 1,592,748 0.3% -0.8% 11.0%
PCL 2,072,004 0.4% -0.3% 0.5%