Continentals retreat from prime London house market

Caution as buyers await outcome of Brexit referendum on EU membership in June

London skyline: just 9 per cent of people buying prime central London houses and apartments in the first quarter of this year came from other EU countries, compared with 29 per cent a year earlier

London skyline: just 9 per cent of people buying prime central London houses and apartments in the first quarter of this year came from other EU countries, compared with 29 per cent a year earlier

 

Buyers from continental Europe have largely withdrawn from the market in expensive London homes as they await the outcome of the UK’s June referendum on EU membership.

Just 9 per cent of people buying “prime” central London houses and apartments in the first quarter of this year came from other EU countries, compared with 29 per cent a year earlier and a five-year average of 20 per cent.

This is despite a 10 per cent fall in sterling against the euro that has made UK homes significantly cheaper for European buyers.

French and Italians are usually the most enthusiastic buyers, agents said.

“The EU has always been the biggest source of international buyers in London, so seeing that falling off – particularly at this time – suggests a bit more caution,” said Fionnuala Earley, director of research at Hamptons International.

London homes priced from £2-£5 million now cost 9.7 per cent less than at their 2014 peak, according to LonRes, a data provider.

Fitch, the rating agency, has predicted that a vote to leave the EU could bring down house prices across the country by as much as 25 per cent and the chancellor said on Friday they would fall by at least 10 per cent. – (Copyright The Financial Times Limited 2016)