Eyes Back on London Property Market
While many sectors in Thailand’s property market struggle to keep afloat from yet another COVID-19 wave, unburdened buyers in the upper market are expanding their property portfolios to the international arena, especially London, The United Kingdom. CBRE, a leading international property consultant, found as schools and education centres reopen this September in the UK, more attention is drawn back to the London property market as family’s wellbeing, residential price growth, stamp duty holiday and high-end buyers’ demand for second homes as alternative residences in times of the pandemic drive the buyers’ decision making process.
Ms. Praphinleeya Phuengkhuankhan, CBRE Thailand’s Head of Advisory and Transaction Services - Residential Sales Ad Hoc, commented, “London’s residential market in the first and second quarters of 2021 have done much better than expected with the UK government’s policies supporting property purchases in terms of bank loans and low interest rates for the locals. Therefore, London’s house prices have grown by around 6% in 2021 and is expected to increase up to 18% over the next five years. Another factor is increased demand from their residents seeking larger usable areas and outdoor space to facilitate their work-from-home lifestyles. Housing projects in Zones 2, 3 and suburban areas are becoming more attractive. The stamp duty holiday also continued to motivate buyers for exemption of GBP 500,000 up to June 2021 and GBP 250,000 until the end of September 2021.”
This price growth is one of the positive signs of London’s recovery from COVID-19 with the vaccines being approved for use since 2020. For non-UK residential buyers, there was increased demand in the market prior to April 2021’s 2% surcharge of stamp duty and the rise of the British Pound. However, CBRE believes these factors will only have a short-term effect on the international buyers and a significant number should return as the UK lockdown is completely lifted and the country’s roadmap to improve their economy includes encouraging both local and foreign buyers towards UK’s property sector.
“Unquestionably, there is more bargaining power on the buyers’ end during the COVID-19 pandemic depending on the popularity of a project. Furniture packages and video walk throughs as part of the house tour are also offered by some projects to attract the buyers. This is a good opportunity for Thais to own residences in London as these additional offerings together with the buyers’ knowledge and familiarity of the London area will quicken the decision-making process. Continuous overseas demand for high-end London property is also coming in from French, Hong Kongese, American and Chinese buyers. The reopening of the UK’s borders in the coming months will help ease the house inspection for these foreign buyers,” Ms. Praphinleeya added.
As London is still a top destination for the educational-focused individuals with its cultural and architectural marvels, historical sites and financial flexibility, there will be recurrent demand from well-to-do international buyers.
This is a good time to invest in resilient markets such as London. The market has always positively drawn back overseas buyers owing to the favourable factors mentioned above that stimulate the buyers’ decision making. Our Thai clients’ main purpose for buying London property has always been focused on providing the best accommodation for their children during their long-term study as well as making a good investment which can be passed down as the family’s inheritance. As the UK’s schools and universities will reopen in September this year, this is also a good opportunity for Thai investors who own London properties to lease them out to international students or small families that prefer to rent,” concluded Ms. Praphinleeya.