Property
Almost 60% of new-build property in central London now bought by Asians
By Finfacts Team
May 26, 2011 - 1:46 AM

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New Knight Frank research shows almost 60% of new-build property sold in central London in the last six months (Nov 10-Apr 11) went to Asian buyers, driven by the favourable exchange rate and London’s status as the top destination for international property purchases, with "strong capital growth potential and stable, long-term investment appeal." Hong Kong buyers were the largest group (24%), followed by Singaporeans (12%) and mainland Chinese (10%), and then other countries in the region.

Knight Frank’s International Project Marketing (IPM) team, which sells UK residential developments to the Asian markets, reports that £120m of its London property was snapped up by Asian buyers in the last two months alone, with particular success in the £400,000-£1,000,000 price bracket. Most recently, the King’s Cross mixed-use development by King's Cross Central Limited Partnership was launched in Hong Kong and Singapore at the start of April and became one of the most successful overseas exhibitions ever.

Knight Frank is expanding its Hong Kong operation to take advantage of the interest in London.

In contrast, France is to hit non-resident owners of 360,000 second homes with a new tax amounting to 20% of the properties' rental value, under a draft law unveiled two weeks ago. It applies whether the property is rented out or not.

Property dealers warned that the measure designed to yield about €176m per year, would have a chilling effect on the holiday market in rural regions like the Dordogne.

The draft, which was approved by President Nicolas Sarkozy's cabinet is expected to pass parliament in time to become law in 2012.

Using various criteria, the tax authorities calculate the rentable value of the property over the year, which is known as the valeur locative cadastrale. The owner then has to pay 20% of that amount. The precise weightings are not clear but you can find the amount you would have to pay at the website www.cadastre.gouv.fr. The site is available in English.

Neil Batty, Head of Knight Frank IPM, commented on prospects in London: “Asia is the fastest-growing region for cross-border sales of London property; having established this business with significant success in Hong Kong, Singapore and Malaysia, we are now rapidly expanding into mainland China.”

Nick Thomlinson, Knight Frank’s senior partner, added: “The decision to strengthen the existing team is a testament to the ongoing importance of the Asia-Pacific markets to Knight Frank and our clients.”


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