Hyderabad, India (PressExposure) April 17, 2008 -- According to a Knight Frank Report issued recently, International buyers account for more than 60% of all house and apartment purchases in the UK capital for properties costing more than Â£4 million (about Rs32.5 crore). The value of London's costliest residences has tripled in the past decade as the number of homes for sale priced over Â£2.5 million has fallen by a quarter in the past two years.
Properties priced at more than Â£4 million rose 43% from June 2006, while homes selling for less than Â£1 million gained just 1.6% in the 12 months. The average price of a luxury house in Knight Frank's monthly index, which draws from seven of London's most expensive districts, is now about Â£5 million, with apartments costing Â£2.5 million.
A typical house has gained in value by at least Â£1,00,000, about four times the average annual UK wage, each month since September. A house which cost Â£1,00,000 at the time the survey began in 1976 would be worth Â£4.32 million today. Monthly gains in the luxury house price index will probably slow to 1% for the remainder of the year. Prime properties in London sell at Â£2,300 a square foot, or 5% more than in Monaco. In New York, comparable homes sell for about Â£1,600 a square foot and in Tokyo for about Â£1,100, according to Knight Frank figures. Indians account for a major share of above Million Pound Homes in LondonLondon's open economy, a stable political environment and an advantageous tax system make it attractive to international buyers, said Knight Frank.
Indians, Chinese and Russians play an important role in the luxury housing segment. Russians favor Knightsbridge, home to Harrods department store, Belgravia, Chelsea, favoured by bankers, and St John's Wood, which includes London Zoo and Lord's cricket ground. They are willing to pay more than Â£10 million for the right property, said Knight Frank. More Russians own London homes costing more than Â£5 million than any other nationality apart from Britons, said Bailey.
"The sheer volume of Russians in London will make it difficult to match them," said Bailey. Many Indian buyers are "keen to uncover bargains," looking for properties or neighbourhoods where there is "improvement potential," said the Knight Frank report. It said many Indians are seeking properties priced between Â£750,000 and Â£1 million, with St John's Wood a preferred part of the city.
Chinese buyers from Hong Kong with up to Â£2 million to spend like to look in Belgravia and Knightsbridge, the report said.
"The incidence of wealthy Chinese buyers purchasing property in central London is only just beginning," said Knight Frank. "Over the next two to three years we expect the number of Chinese applicants to speed up noticeably."
Emerging markets are growing faster than developed economies and the UK is the favored country for inward investment into Europe, boosting residential property purchases. India ranks second behind the US for inward investment projects in Britain.
"The UK, and in particular London, by virtue of its status as one of only two truly global financial centres, is a major beneficiary of this trend and should continue to do so for some time," said Knight Frank.
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