Foreign Buyer Return Could Boost London House Prices By £134k

Foreign Buyer Return Could Boost London House Prices By £134k

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A return of foreign buyer demand could boost property values by £134,000 in some pockets of the capital’s property market according to the latest property market analysis by London lettings and estate agent, Benham and Reeves.

London House Price Trends

Based on Land Registry data, Benham and Reeves analyzed London house price trends in the six months since travel restrictions dampened foreign buyer activity and how this rate of growth differed from the six months prior. Benham and Reeves then looked at what a return to form may look like once travel restrictions have been lifted.

Since the UK decided to close all travel corridors from the 15th January, house prices have climbed by 2.1% across the London market. This is a 0.5% reduction in the rate of growth seen in the six months prior when prices climbed by 2.6%.

Should travel restrictions remain in place and a similar level of growth remain over the next six months, the average London house price would climb by a further £10,701. However, should restrictions lift and foreign buyers be able to return at mass, this additional 0.5% boost would see prices climb to £13,496 - a £2,795 increase in market values.

The prime central pocket of Kensington and Chelsea is due to see the biggest benefit from a return of foreign interest. In the six months prior to the travel ban, the average house price in the borough increased by 2.6%.

However, since then it has fallen by -8.2% to £1,239,831 and a similar reduction over the next six months would see a further £101,267 loss in value. In contrast, a foreign buyer revival of 2.6% in values would add £32,365 to the average house price in the borough, a total turnaround of £133,631.

Other boroughs that could benefit most from a return to pre-travel ban form include Haringey (+76,582), Southwark (+£68,705), Merton (+£41,434), and Lewisham (+£24,207).

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