Asian tastes influence luxury developments in London7 August 2015
A recent headline reporting that overseas investors spent £1.8bn on London property in the second quarter of 2015 dispels false rumours that a residential address in the UK capital is no longer viewed a safe haven for foreign capital.
Data showing that international investors’ spending on land and property in London is up 118% year-on-year and at its highest level since 2007 follows the 2015 general election result that not only returned a majority Conservative government but calmed fears about the introduction of a mansion tax threatened by the Labour Party.
It should not come as a surprise that a large portion of international investment in London homes comes from Asia. Many property buyers from south-east Asian are desperately seeking alternative assets, with financial news in recent months having made for grim reading.
Not only did shares in China crash by almost 8.5% in one day in July – the biggest daily drop in eight years – the Singapore property market is experiencing its worse downturn in 15 years, and prices may fall by as much as 5% by the end of 2015.
Meanwhile, the expected bursting of the Hong Kong property market bubble may now finally happen. In fact, Moody’s highlights this as the number one major economic fear in its Asia-Pacific outlook.
Why is London so attractive to Asian investors?
For many international investors, London has long been a go-to haven. With its iconic cultural landmarks and track record of strong capital gains plus increasingly attractive rental incomes, the UK’s most popular and exclusive addresses are in high demand.
Not only that, London continues to offer international investors a stable economy and political environment, a legal system admired the world over and a fair tax system.
Despite recent rises in stamp duty charges on properties bought for more than £937,000 and changes to capital gains tax demands on non-domiciles, London’s ace card for investors from Asia is the UK capital is viewed as a must-have for property developers building their business brand. Owning a property in London is something that will add to the value and awareness of their business.
Two key drivers for many overseas investors looking at property in London are immigration and education. The UK remains the European country where Asian investors would like to have residency. From an education perspective, an increasing number of wealthy families are sending their children to the UK for education, either at boarding school or university.
Where to buy in London
Anything outside central London is seen as an “unknown quantity” to many investors from China, Hong Kong and Malaysia.
But with property in central London in short supply – just 3,900 homes worth £1m or more were sold in the most desirable area of the capital in 2014 – investors are now focusing their attention on new developments.
Around 25% of London’s new-build property market share already belongs to Asian investors. And that market share is set to rise further.
At the start of 2015, about 54,000 homes were either planned or under construction in the priciest areas of the London between Earl’s Court and Regents Park to Tower Bridge and the South Bank.
The design of many developments at the luxury end of the market is starting to follow what is favoured by investors from China, Singapore and other areas of south-east Asia.
For example, high-rise towers with shared gyms, communal leisure areas and underground parking – common features in the east – are becoming increasingly common amenities in new developments in London.
Abell and Cleland House, a prestigious, luxury development at the heart of London’s iconic Westminster district, offers its residents picturesque courtyard gardens, an opulent lobby with a dedicated 24-hour concierge service plus a host of exclusive amenities, including business suite, private cinema, gym, pool and sauna.
Other developments in the heart of Westminster, the seat of the UK government, include The Courthouse. On the site of the former Westminster Magistrates’ Court and next door to the Home Office, this stunning development has been completed to the highest standard with a Portland stone and bronzed aluminium exterior. Inside, residents benefit from a grand opulent lobby, 24-hour concierge, landscaped gardens and a fully equipped gymnasium.
Meanwhile, 1 Palace Place ticks every box for investors seeking a prestigious London address. Located in sight of Buckingham Palace, the building occupies a prominent corner position within a historic conservation area. Facilities at this development include a 24-hour concierge, secure parking and St James Theatre on ground level.
Garton Jones has a wide range of properties available for investors from the UK, Asia and beyond. For one-to-one help locating your perfect property, contact our Westminster office today.