Wealthy Indians are snapping up properties in some of London's most desirable areas, giving the city's under-pressure property market an important boost.

Clients from India and Pakistan bought 11 per cent of the £3 billion of properties worth over £5 million in the capital last year, according to research by estate agency Savills, easily outstripping Chinese clients who accounted for around 7 per cent of that market. Around two-thirds of that number were from India.

“This is substantially more than we've seen in previous years,” said Ms Yolande Barnes, head of residential research at Savills.

“We would expect the trend to continue.”

The majority of the properties bought by Indian clients were in the traditional central areas, including South Kensington, Mayfair, Chelsea and Belgravia — in contrast to Chinese clients who preferred new builds, largely in the east of the City.

The biggest group, as might be expected, was domestic, accounting for 40 per cent of purchases in that price bracket, followed by Europe, including Russia (20 per cent) and West Asia (15 per cent).

In all cases, around 90 per cent of the acquisitions were made in cash.

Demand from overseas has been spurred by the relative weakness of the pound, which also fell steeply against the rupee: A pound was worth around Rs 68 in mid-2010, compared to around Rs 79 in the same period a year before.

Safe haven

Over that period, the relative importance of foreign equity to the top-end London property market also increased, as the size of city bonuses fell.

Savills has conducted research recently, which revealed that the world's high net worth individuals bought London real estate in a similar pattern to gold: As a commodity to store wealth, and hedge against uncertainty.

“A lot of buyers use it as a safe haven,” said Ms Barnes.

Related Topics
comment COMMENT NOW