ALBAWABA — The top end of London’s prime real estate market saw wealthy Middle East buyers hit a four-year high in the second half of 2022, taking advantage of the weak pound and more relaxed COVID-19 restrictions to buy up luxury properties.
Foreign buyers accounted for 57 percent of London real estate market last year, compared to 65 percent in 2015, according to data compiled by MSCI Inc.
“Compared to some parts of the world, buyers from the Middle East have been relatively free to travel to London and take advantage of the weak pound, which has resulted in discounts of more than 40 percent compared to 2014 when price and currency movements are combined,” Tom Bill, head of UK residential research at property consultant Knight Frank, told Bloomberg in a statement.
During the first half of 2020, at the peak of the pandemic, buyers from the region accounted for just 2.2 percent of all of the sales in London’s top postcodes, while accounting for 11 percent during Q3 and Q4 of 2022, just trailing European and UK buyers.
Black Brick, a leading London-based buying agency, in a press release said that Middle East buyers accounted for 23 percent of its active clients.
Middle East clients, with budgets ranging from £1.5 million to £45 million, consider London a safe investment haven due to its historic track record, growing economy, and world-renowned educational and cultural institutions, Black Brick said, while announcing that its managing partner and founder, Camilla Dell, will be visiting the Middle East with a business trip to Dubai and Abu Dhabi later this month to update clients on the London property market and raise the profile on the benefits of using a buying agent when considering purchasing property in London.
In 2023, London faces uncertainty over real estate valuations as rising interest rates and political chaos triggered by the September 22 mini-budget fiasco proposed by then Chancellor of the Exchequer Kwasi Kwarteng for Prime Minister Liz Truss' short-lived government.
“Wealthy families are not looking at London as a one- or two-year play, they are taking a long-term view, typically committing for the next 50 years,” Henry Faun, partner and head of Knight Frank’s Private Office in the Middle East, told Bloomberg.
“Investors remain bullish on London’s outlook; the Emirati clients I am speaking with feel it currently offers an opportunity not matched elsewhere globally and will bounce back strongly as it always has,” Faun added.
