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Chart of the Day: London house prices soar as Chinese move in
Rich foreign buyers are pushing up house prices in prime central London, with a huge increase in the number of Chinese buyers.
Markets
by Chris Marshall on Jan 05, 2012 at 11:32
Here’s a number to knock your natty Christmas socks off. The average asking price for prime central London property is now £1,091,739, having risen by 24% since November 2010.
The figure is from Winkworth’s quarterly property review, in which the estate agent explains: ‘With the eurozone in turmoil and currencies in Asia strong against the pound, property in central London has become even more attractive for investors looking for a safe haven for their assets over the closing months of 2011.’
‘Property in prime central London is still viewed as an excellent and relatively low-risk long-term investment and this has caused a rise in new buyers entering the market, particularly from overseas.’
Source: Winkworth quarterly review of the UK property market
And where are those buyers coming from? Well, according to Winkworth, in the three months to November buyers from China made up a quarter of all foreign investors in central London (see chart above), up from 20% in the three months to August and 11% in the three months to May 2011.
These cash-rich Chinese buyers, hailing as they do from the world's fastest growing major economy, appear to be seeking an escape from their own troubled property market. They are diversifying their assets, spending some of the gains from China’s boom years, which have greatly enriched a few, if not a majority, of the country's inhabitants.
It certainly means that young professionals in London, however well they may think they are doing, will be shoved further out into the suburbs or commuter towns, or will be forced to continue renting.
19 comments so far. Why not have your say?
MC
Jan 05, 2012 at 12:42
This is what happens when we let non-doms get away with paying so little in tax.
report thisS-ville
Jan 05, 2012 at 13:04
Westminster Council are pretty lax in chasing them for Council Tax as well!
report thisRedundant (Old Timer?)
Jan 05, 2012 at 13:18
Time to bring in an annual tax based on the actual price paid for properties over say £1million. Set it low, say 0.5% (= £5,000 per £1million), and these rich people will pay it. To stop them using overseas companies to avoid this tax, put the tax on the property itself, rather than the owner, and make it that if the tax is not paid within 12 months of being due the property is forfeited to the State!! These rich people will pay the tax and it will not affect property values as London property will still be a good investment.
report thiswilliam barbour
Jan 05, 2012 at 13:28
Just one listed London Prime Housebuilder who are doing so, so, well by building through the last 4 years and selling flats for unheared of amounts of money.
Great work if you can get it.!!
report thisAdam Eve
Jan 05, 2012 at 13:49
Redundant (Old Timer?)
Excellent idea BUT lets make it 5% (50,000 per million) they will still pay it AND its worth collecting.
report thisAlan Tonks
Jan 05, 2012 at 13:53
So what do we call London, China Town? Then within a few years the UK becomes a province of China. Not being pc I think we should bring back China Gordon.
report thisjingoistic
Jan 05, 2012 at 14:32
Most of you will havw voted for it,Its called Capitalism.
report thisAlan Tonks
Jan 05, 2012 at 17:03
No it isn't jingoistic it is called CAPITULATION.
report this51Degrees North
Jan 05, 2012 at 17:06
Wait, no Americans?
report thisChristopher
Jan 05, 2012 at 17:28
Why don't you people stop grumbling and get some value out of all these rich people buying houses. They need lawyers, cleaners, builders and decorators, drivers, restaurants, organic greengrocers, fishmongers. drycleaners etc etc. Go to work on them.
report thisPeter Wilkinson
Jan 05, 2012 at 20:29
The percentages expressed in the pie chart may be suspect - the pie chart certainly is!
Italy (9%) v India (9%) v China (26%)?
Source = Wonkyworth
report thisClive B
Jan 05, 2012 at 21:59
LibDems would just love to get a property tax accepted. They'll do it by promising it'll only be for the rich, then the level at which it's invoked will come down and down until we're all paying it.
Silly idea imo, just another tax on everybody.
report thislandlord 88
Jan 06, 2012 at 17:45
Whats the problem ?
Brings money into the country and jobs.
After 1997, Vancouver was renamed VanKong.
After 2012, London could well be Chindon.
Teach the government to bleed us dry and cant afford to buy our own place.
report thisiain millett
Jan 07, 2012 at 08:42
Stamp duty on house purchase in the UK should be based on all UK based property and not the domicile of the owner. Like all property bubbles this one will burst eventually - especially if the UK's rating begins to be attacked.
report thisJon Pratt
Jan 07, 2012 at 10:19
The estate agents were bleating on a couple of months ago about the ‘wave of Greek money’ that was flooding the central London market. Nice to see that Greece does not even show up on this chart…..
You cannot trust any information from an estate agent. They are just trying to con the next mugs in to the house of cards that is the London property market.
It is a shame that so many Chinese investors are going to lose their shirts though.
report thisChristopher
Jan 07, 2012 at 10:29
Jon Pratt I think you are wrong - i don't think many people have lost their shirts betting on high class central London property. I think the Greeks lost theirs elsewhere.
report thisJon Pratt
Jan 07, 2012 at 10:46
Christopher. The operative word is 'yet'.
Although, if you look at it in USD, AUD, CHF terms etc plenty of people have lost plenty of money.
However, if you are keen on London property, maybe you can buy a place from one of the 10,000 RBS Global Business & Markets employees who are about to lose their jobs. That should keep prices on the up and up.
It is a Ponzi scheme. Not long now till it goes pop……
report thisSimon W
Jan 09, 2012 at 09:52
Peter W should have gone to spec savers; Italy's slice is 19%
report thisPeter Wilkinson
Jan 09, 2012 at 23:10
Simon W
Its amazing how the chart gets corrected in 72 hrs!!
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