According to property expert Knight Frank, Middle Eastern buyers of prime real estate in central London reached a four-year high in the second half of 2022 when they took advantage of the depreciating pound and loosened covid regulations.
Just behind investors from Europe and the UK, buyers from the region accounted for 11% of real estate transactions in some of London’s most premium postcodes. According to Knight Frank, the last time purchasers from the Middle East made up a larger share of purchases in the region was in 2015.
“Compared to some parts of the world, buyers from the Middle East have been relatively free to travel to London and take advantage of the weak pound, which has resulted in discounts of more than 40 percent compared to 2014 when price and currency movements are combined,” Tom Bill, head of UK residential research at Knight Frank, said in a statement.
Investors made just 2.2% of all sales in London’s top postcodes from the Middle East during the height of the pandemic in the first half of 2020 because the region, along with much of the rest of the world, had implemented a number of strict social restrictions to lessen the impact of the virus.
Middle Eastern nations, including the UAE, notably refrained from the widespread full-scale lockdowns and instead depended on strict mask regulations and vaccination programmes. Visitors from around the world seeking to escape restrictions in their native nations were attracted by the government’s quick response to the pandemic. One of the fastest vaccination rollouts in the world was in Dubai, a part of the UAE.
Capital inflows
In the first half of 2022, London attracted the highest capital inflows of any city in the world. However, with interest rates rising and political unrest following September’s mini-budget this year, London confronts uncertainty over property valuations. According to information collected by MSCI Inc., foreign dealmakers made up 57% of London real estate investment last year, down from 65% in 2015.
“Wealthy families are not looking at London as a one or two-year play, they are taking a long-term view, typically committing for the next 50 years,” said Henry Faun, head of Knight Frank’s Private Office in the Middle East. “Investors remain bullish on London’s outlook; the Emirati clients I am speaking with feel it currently offers an opportunity not matched elsewhere globally and will bounce back strongly as it always has.”
Since sales started late last year, buyers from the Gulf area have shown a lot of interest in 8 Eaton Lane, one of London’s newest luxury residential complexes where two-bedroom apartments start at 3.8 million pounds, according to Knight Frank. With features like a gym, spa treatment rooms, swimming pool, cinema, and business suite, the Grade II listed property in London’s Belgravia is being converted into 42 homes and seven shop spaces.