Half of central London’s £1m-plus homes go to non-UK buyers

Half of buyers of central London property costing more than £1m were foreign, according to research according to Knight Frank, the property group. The high number, in the year to June 2013, will add to a growing controversy around affordability in the capital, and follows other reports suggesting the flow of foreign money into London housing is distorting the wider housing market.

Central London or “prime London” are classed as those neighbourhoods around Hyde Park including Kensington, Mayfair and Knightsbridge. Here there has long been activity by foreign buyers. Knight Frank’s research found 49pc of buyers in these areas were non-UK by nationality. When it came to buyers’ country of residence, however, the majority – 72pc – lived here.

Non-UK buyers were made up mainly of Europeans and those from the Middle East. Russian buyers were also a dominant group, Knight Frank’s research showed. It had previously reported on high numbers of French and Italian buyers, especially in early 2012 when fears around the future of the euro were high.

Where the properties were newly-built the proportion of non-UK buyers rose even higher to 69pc. The supply of such property – which include landmark developments such as One Hyde Park – is very thin, however.

Knight Frank’s Liam Bailley said: “The higher share of international demand for new-build property, compared to the wider market, relates to the attractiveness of new-build property for investors who prize convenience and lower maintenance.”

Knight Frank stressed that outside of the hugely expensive and international postcodes of prime central London, most buying was by UK nationals. It said 93pc of buyers of all newly-built properties in greater London, for example, were UK.

Percentage of all buyers of UK nationality