Although UK investment in property abroad rose by 229% from 1994 to 2004, overseas investors are equally vociferous when it comes to buying property in Britain, says a new study, The International Demand for UK Residential Property 2008, from top-end agent Knight Frank (www.knightfrank.com).
Last year in London and the south east of England, 37% of property in the £1 to £2 million range was bought by overseas investors. The majority of these purchasers came from Europe (11%), followed by Russia (5%) and the Middle East (4%).
There is an appetite for overseas investors to buy property abroad, says Liam Bailey, Knight Franks head of residential research. The question is how easy is it for them to get capital out of the country and place it elsewhere?
The price band for investors has widened encompassing property priced between £175,000 and £5 million, with purchasers from emerging nations like Kazakhstan, India and South Korea.
A lot of high-end foreign buyers come from Asia and the Middle East due to the success of commodities like oil and manufacturing in their countries, Mr Bailey explains. Once these high net worth individuals make money, they create a global portfolio and a lot of investment comes down to what they know and the city of London is the place that springs to mind when foreign investors think of Europe.
Investing in rural property tends to be for foreign buyers own use, compared to buying in the English capital, where foreign investors purchase a mixture of high value homes where they live alongside lower end property for investment.
Increasingly, intermediaries are carrying out research for these wealthy individuals and I hope the work is done properly adds Mr Bailey, who is not convinced advice handed out to foreign buyers is always of the highest quality.
