Following 2015’s changes to the Liberalised Remittance Scheme in India, which increased the capital which buyers can bring into the UK to $250,000 per person, prime central London property has seen a notable surge of purchases from wealthy families from the region, who now represent the second-largest nationality in the marketplace. 

India-based investment rises significantly

According to London Central Portfolio’s (LCP’s) latest sales audit, buyers from the Indian subcontinent represent 22 per cent of purchasers in prime central London property, an increase from 5 per cent two years ago, before the change in the system.The average purchase price by Indian buyers, at £1.77 million, has also overtaken the market average of £1.6 million, with buyers from the region representing one third of the total spend in terms of value. The increased interest from Indian investors has not only come from private individuals, but has also been reflected in a move from institutions and developers from the subcontinent who have been buying up large tracts of the capital.In 2014, Mumbai-based Lodha Group acquired the Canadian embassy in Mayfair for $530 million, alongside New Court on Carey Street, announcing plans to become one of London’s biggest investors with a planned $5 billion spend. Another investor, Indiabulls, also entered the market, investing £155 million in Hanover Square.

---

Related stories:

• Savills’ profits surge on the back of Asian investments
• SE England dragging down housing price growth
• London remains Europe's favourite city for tech investment

---

Naomi Heaton, CEO of London Central Portfolio, comments, “Despite two years of slower price growth due to tax headwinds and the UK’s Brexit vote, prime central London has remained attractive to international buyers as a safe-haven asset class, with the rule of law and proper title to property.“As India has become a more challenging place to invest in, with high loan interest rates and rising prices in the main urban centres, together with increasing global political and economic uncertainty, Indian buyers with a larger amount of capital to spend have increasingly turned to London as an investment destination of choice.“As sterling has weakened against foreign currencies, representing a 20 per cent discount for USD-denominated investors compared with two years ago, we are now seeing Indian buyers becoming an increasingly dominant force in the marketplace. They have overtaken buyers from the Middle East who have fallen to third place.”

European investors wary amid Brexit uncertainty

The increase in Indian buyers, however, has been set against a significantly decreasing number of European investors following the Brexit vote, according to LCP. Representing the second largest nationality two years ago, buyers from continental Europe have plummeted with their share of the market falling by over two thirds.Naomi Heaton said, “Sales volumes in prime central London have fallen across the board, down 41 per cent in Q1 to just 3,406 sales annually, compared with the previous year. This is due in large part to significant increases in taxation.“However, the most reduced pool of buyers has been from Europe, who have adopted a ‘wait and see’ attitude as Brexit talks continue. As the group most impacted by the outcome of the UK’s exit from the European Union, a bounce back among these investors will very much depend on the result of ongoing negotiations.”For related news and features, visit our Residential Property section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.