Following the General Election in May which resulted in David Cameron winning an outright majority with the Conservatives, there has been a spike in investment in London’s prime residential estate from gulf investors.
Recent research has suggested that the UK following the election has experienced an invigorated interest from investors in London property, specifically from those Middle Eastern investors.
However, before the election took place, those buyers who came from the Gulf region made up around 20 percent of the whole market for residential property that was recently built in prime central London. Since the election, enquiries from investors from the Gulf Region have increases and there is a belief that it will result in regional buyers eventually making up 30% of sales after the election.
The research carried out by property experts Hopwood House has found that London is still an extremely popular choice for those investors from the Middle East because of the excellent infrastructure, steady political and legal framework as well as the quality of life available. London has always been a popular attraction for institutional commitments from the Gulf region but this is now changing and there are now more individual investors purchasing property in London that are being used as a second home.
It was also found that once it had been announced that the Conservatives were in power, it renewed confidence in the market and this has turned into a strong increase in interest from those in the Middle East.
London continues to attract because it is a political safe haven and economically it is sound and it is now seen as a financial centre and this is resulting in Middle East investors showing confidence by purchasing property, this is because they know that it is a safe investment.
The demand from a large number of international buyers has continued as they use their property in London as a hub for their spouse or children to live as they go through education in the city which means that it is more beneficial to purchase a property rather than rent for 3-5 years.
The reports highlight how the activity in prime central London is likely to revisit the levels it was previously at as demand increases. This year it is expected that the prices of property in prime central London will increase by 7% and over the next five years it is expected that the total growth will reach 31%.
London is one of the most popular cities in the world when it comes to attracting affluent international buyers. This has seen London super-prime prices sit in second place behind Hong Kong at a cost of £4,824 per square foot.
The report also showed that those investors from the Gulf who have a high net worth are attracted to UK property investments in London for several reasons such as the lifestyle, language, ease of access and time zone.