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World's multi-millionaires buy up London properties

London is now home to the highest number of multi-millionaires in the world. That's reflected in the appetite for properties in the British capital in exclusive postcodes, and about 85 percent of those super-prime residences are being bought with foreign money.

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3 min read

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By Brett Mason

Source: SBS


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They are Monopoly board suburbs: exclusive postcodes, home to luxurious properties, where record numbers of international buyers are willing to roll the dice and take a chance.

Stuart Bailey from Knight Frank Real Estate showed me one of these expensive properties for sale. "This is 14.7 million. It is pretty much just what your average international buyer would be looking for".

In the last year, 85 per cent of London's super-prime properties have been bought by foreigners, signing contracts in more than 80 languages.

"One doesn't want to use the term "safe haven" too often, but that's the reality. It's preservation of equity. What a lot of people consider to be a triple-A asset class," he said.

Stalled growth, rising debt and plans to impose a top tax rate of 75 per-cent in France prompted a surge in French buyers.

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Independent real estate advisor Sandra Gowen-Roth says London is deemed 'the 21st district of Paris'.

Managing director David Chermont is now based in London and regularly commutes to Paris. "London has now become the sixth largest French city. There is around at least 400,000 French people in the UK. So it has been a huge magnet," he said.

The French retreat allows wealthy foreigners to seize grand properties in what Parisians call 'the golden triangle'.

Alexander Kraft from Sotheby's International Realty is handling the sale of one of the most expensive apartments ever sold.

"The market has a little bit hit the rock, however very special properties like this one still continue to sell even at very elevated prices," he said. 

"After the elections, a lot of wealthy French people were rather shell-shocked, especially with the announcement about tax hikes and many people chose to leave France for the time being. That trend is still continuing, but people who are wealthy - but perhaps not quite as wealthy - are coming back to the market.

This is a recovery that French agents and British first home buyers hope will continue, said Kerstin Bachmann from the  Paris Property Group.

"Last year's very unpopular tax reforms made quite a few people hesitate and, as a consequence, the volume of transactions went dramatically down. There have been some adjustments in the market that were necessary. Paris is traditionally a sellers' market, but now that has changed to a buyer's market. They have a stronger position to negotiate price".

While foreign investors are buying up big in London, in some of the most expensive postcodes, the reality for locals is much different. It seems many are being priced out of their own market.

For example, an east-London car wash is being redeveloped into a residential tower block. The apartments are being sold off-the-plan to cashed-up investors in Singapore, and it will likely be rented back to Londoners, struggling to buy their first home.

"There's no doubt the weak pound over the last few years has contributed to higher price growth and it has certainly meant for domestic buyers there has been more competition and you can see that now, with prices rising outside of central London," said Liam Bailey from Knight Frank Real Estate.


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