The status of Britain as a haven for foreign investors looking for decent returns in housing in the wake of the economic crisis may be coming to an end<\/p>\n
With its forest of cranes and mushrooming show apartments dangling plutocrat baubles from car lifts to Versace children\u2019s play areas, Battersea remains outwardly the buzzing epicentre of the property boom that has turned London into Britain\u2019s very own Monaco.<\/p>\n<\/div>\n
But if the rumblings from within a circle of brokers and investors involved in the redevelopment of the south London former power station and the surrounding Nine Elms area are anything to go by, the legions of foreign investors credited – and blamed in equal measure – for driving the capital\u2019s decade-long luxury property boom may finally be getting cold feet.<\/p>\n
Sime Darby, one of the major stakeholders in the redevelopment of the 42-acre Battersea site, acknowledged a \u201csoftening of interest\u201d in buyers from Malaysia and elsewhere in southeast Asia who had previously been responsible for the spending splurge which saw the area dubbed\u00a0 \u201cSingapore on Thames\u201d. The Malaysia based company insisted that none of its existing sales agreements had been cancelled.<\/p>\n
But with one estate agent recording a 10 per cent drop in the value of luxury homes in Battersea and its environs in the year to June, experts blamed the cooling of ardour for buying up London\u2019s high-end penthouses on the strengthening of the pound in recent months and economic volatility in the home markets of investors.<\/p>\n
Among those hardest hit are Russian buyers, who have seen the rouble fall by 55 per cent as a result of sanctions imposed following Moscow\u2019s annexation of Crimea.<\/p>\n
Estate agent Knight Frank said purchases of prime London homes by Russians had fallen to 2.9 per cent of the total in the first six months of 2015, compared to 6.7 per cent in the previous period. Singapore-based buyers more than halved to 1.4 per cent and Chinese investors dropped to 9.4 per cent from 10.9 per cent.<\/p>\n
Sime Darby, which owns 40 per cent of the Battersea project, said in a statement: \u201cWe are witnessing softening of interest among buyers from Malaysia and southeast Asian regions, probably due to the prevailing volatile currencies and uncertainty in economic outlook. No exchanged contracts have been cancelled to date.\u201d<\/p>\n
Nine Elms, which will host the new American embassy as part of a \u00a32bn redevelopment billed as the \u201cgreatest transformational story at the heart of the world\u2019s greatest city\u201d, has been the scene of some of the most febrile trading in the luxury property boom while less-monied Londoners struggle to get a foot on the housing ladder and essential workers face a dearth of affordable housing.<\/p>\n
The area last month saw the launch of the latest development to attempt to catch the eye of the planet\u2019s have-yachts in the form of the Aykon Tower – the capital\u2019s first apartment building to be fitted out by Versace, complete with scatter cushions and a gold mosaiced swimming pool by the Italian fashion house.<\/p>\n
Its Dubai-based developers insisted there had been strong interest in its 50-storey millionaires\u2019 bolt hole. But the apparent broader waning of interest in Battersea makes it a bellwether for a broader \u201ccorrection\u201d in London\u2019s hyperventilating property market.<\/p>\n
Evidence emerged last month of a wave of \u201cflat flipping\u201d in the Nine Elms area, where developers are jostling to sell 18,000 new homes over the next decade, as investors who paid a ten to 20 per cent deposit sell on their not-yet-built property amid widespread concern that many of the properties have been bought as currency speculation \u201cplays\u201d by Asian investors and prices are likely to fall as they attempt to cash in.<\/p>\n
One leading expert told The Independent<\/em> that the status of Britain as a haven for foreign investors looking for decent returns in housing in the wake of the economic crisis was coming to an end and London property now represents a \u201crisky\u201d buy.<\/p>\n Paul Cheshire, emeritus professor of economic geography at the London School of Economics, said: \u201cConditions in financial markets and such low interest rates have converted property and especially top-end housing into an investment asset \u2013 yields are so low on such a wide range of assets.<\/p>\n \u201cGiven the very inelastic supply of housing in Britain in general and in London in particular\u2026 there is [now] a lot of risk in housing in England and the top end in London in\u00a0 particular.\u201d<\/p>\n With economists predicting a fall in the price of prime central London property of 10 to 15 per cent, some argue that a long-awaited dose of real estate reality is already beginning to hit the capital. Online estate agent eMoov said it had recorded a three per cent drop in demand for housing worth \u00a32m or more in a single month in May. Demand has fallen since May in some 60 per cent of \u201cprime\u201d London boroughs, such as Westminster or Kensington and Chelsea.<\/p>\n Founder Russell Quirk said: \u201cI don\u2019t think that there are many who will shed a tear for the well-heeled, sharp suited Mayfair type property predators. They have long crawled along the golden streets of prime central London, yet it seems that the tide has turned.<\/p>\n \u201cLondon has been a Monaco in the middle of Britain. But what comes up must come down and we are now starting to see a rebalancing with other parts of the country.\u201d<\/p>\n What remains to be seen is whether the Government\u2019s recently-discovered determination to crack down on another factor in London\u2019s attractiveness as a property investment – the ability of foreigners to hide \u201cdirty money\u201d in its shiny glass and steel buildings – will add to any cooling of the market.<\/p>\n Transparency International revealed last month that more than 36,000 London properties are owned by offshore companies in jurisdictions which protect the identity of their owners – including up to 9.3 per cent of property in the City of Westminster.<\/p>\n The research prompted Prime Minister David Cameron to express concern that properties in London \u201care being bought by people overseas through anonymous shell companies, some with plundered or laundered cash\u201d. He pledged to publish a new Land Registry listing of foreign companies and the land they own.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The status of Britain as a haven for foreign investors looking for decent returns in housing in the wake of the economic crisis may be coming to an end With its forest of cranes and mushrooming show apartments dangling plutocrat baubles from car lifts to Versace children\u2019s play areas, Battersea remains outwardly the buzzing epicentre […]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-1272","post","type-post","status-publish","format-standard","hentry","category-news","category-uncategorized"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9PjAq-kw","_links":{"self":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/1272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/comments?post=1272"}],"version-history":[{"count":0,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/1272\/revisions"}],"wp:attachment":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/media?parent=1272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/categories?post=1272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/tags?post=1272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}