Within London Central Portfolio’s (LCP) managed client portfolio, the number of buy-to-let investors has seen a significant decrease over the last 12 months, with its share of purchases falling from 85% to 55%.
Purchase activity has been much slower in the ‘£1m and under’ sector, which is largely dominated by these buyers. The sector saw a 9.4% decrease in sales in Q2 and the average purchase price for rental investors has fallen 27% to £816,429 over the last year.
LCP said homebuyers, increasingly attracted by discounted luxury property, now represent 45% of all purchases in Prime Central London (PCL), and have tripled their share over the preceding year.
This is reflected in swelling numbers of luxury sales, with a 23% increase in activity in Q2 in the £5m – £10m bracket. Houses in trophy addresses have become much more popular, with a 4.1% increase in sales and a 4.9% increase in average prices in Q2.
According to Land Registry data, average prices in PCL reached £1.9m following quarterly growth of 5.8%, boosted by a handful of high value sales. Transactions have remained at very low levels with just 3,750 sales over the last 12 months.
The number of flat sales has fallen 11% and prices have increased by just 2.6%.
LCP said the “desertion” of PCL’s new build sector continues, reflected in a 55% decrease in sales in Q2, compared with 9% for the PCL market overall.
Buyers from the Far East Asia are the biggest buyers, making up 36% of purchases over the last 12 months, followed by Indian and Middle Eastern buyers at 22% and 21% respectively.
Naomi Heaton, CEO of London Central Portfolio, said: “As international homebuyers identify attractive discounts on top-end properties, particularly as Sterling remains weak, they have actively re-entered the market, snapping up deals in London’s best addresses.
In stark contrast, buy to let investors have remained on the side-lines trying to call the bottom of the market, resulting in a much-reduced share of purchases”.