The report stated: “According to LCP’s latest sales audit, buyers from the Indian subcontinent represented 22% of purchases in PCL, an increase from five per cent two years ago. Their average investment at £1.8m has also overtaken the market average of £1.6m, with Indian buyers representing one third of total spend in terms of value.”
It believes there are a variety of reasons for this:
- India has become a more challenging place to invest in, with high loan interest rates and rising prices in the main urban centres.
- The changes to India’s Liberalised Remittance Scheme in 2015 increased the capital that buyers can bring into the UK to US$250,000 per person.
- Sterling weakness represents around a 20% discount for US dollar denominated investors compared to two years ago.
According to LCP’s audit. the increase in Indian buyers has been set against a decreasing number of European investors following the Brexit vote.
The broker view
When contacted about the increasing prominence of buyers from India in the prime London residential property market, the experience of mortgage brokers appeared to differ widely.
Mark Harris, chief executive at SPF Private Clients told Mortgage Solutions:
“Indian investors have picked up in the last couple of years but European investors continue given the strength of the euro.”
At Enness, mortgage broker Chris Lloyd hadn’t noticed Indian buyers becoming more conspicuous: “I’m not aware of this trend, although we’ve noticed more buyers from Dubai and the US investing, probably tempted by Sterling weakness and the fact that lots of lenders are starting to reduce rates for overseas buyers. We are now able to source mortgages with rates of two per cent this year; down from three per cent last year and the year before.”
Interestingly, the report also notes that increased interest from Indian investors has come not only from private individuals and wealthy families but from institutions and developers who’ve been buying into the UK’s capital. In 2014, Mumbai-based Lodha Group acquired the Canadian embassy in Mayfair for $530m, alongside New Court on Carey Street, announcing plans to become one of London’s biggest investors with a projected $5bn spend. Another investor, Indiabulls, also entered the market, investing £155m in Hanover Square, Mayfair.