Is London the new Singapore when it comes to property?
PUBLISHED: 16:28 20 June 2017 | UPDATED: 16:28 20 June 2017
Matt Crossick/Empics Entertainment
Will a post-Brexit London become the new Little Red Dot as multimillionaires use it as a launching pad for Europe?
Could Little Venice be the new Little Red Dot, Golders Green the new Garden City? Is The Ritz the new Raffles? Potentially, if property designer and developer Finchatton is correct.
The luxury developer has suggested to Spear’s that a post-Brexit London offers a unique a springboard for access to the rest of Europe, much like Singapore in Asia.
Another popular banking destination, Singapore boasts four official languages (English, Tamil, Malay and Standard Mandarin) with Chinese, Malaysian and Indian ethnicities making up the bulk of the demographic landscape.
A multicultural expat haven popular with tourists on stopovers before travelling to other Asian destinations, Singapore sounds somewhat familiar.
The city state even has its own version of the popular north London ‘villages’. Holland Village has long been favoured by expats for its centrality, amenities and proximity to the green spaces of the Singpaore Botanic Gardens.
The East Coast is popular with families for its good schools and rural feel whilst luxury property hunters seek out Sentosa Cove where property goes for over 20 million Singapore Dollars, or £11,329,140.
Singapore’s property market is back on the up after a sluggish three years and commands similar prices as Prime London property.
Sales hit a four-year high in March after the government reduced stamp duty and eased mortgage restrictions; London take note. A luxury three bedroom apartment in popular Orchard comes at £4,250,000 with a maid’s room, balcony and barbeque area as well as access to a gymnasium whilst a one bed flat in nearby Novena will set you back £650,000.
With Singapore’s expat community arriving from near and far, London’s residents are equally as diverse, and growing in size. Finchatton’s reported a 38 per cent increase in enquiries since the referendum.
“London is still considered one of the world’s top financial cities and is continuing to attract overseas buyers (reflected by fact 37% of its residents were born overseas), says Jenny Naylor, marketing director at Finchatton.
“The reasons prime central London (which includes Marylebone, St John’s Wood) is seen as a good place to invest is multi-faceted. Despite the political uncertainties, the UK is not perceived to be subject to the same EU-related risks as other European cities, and is generally supportive of inward investment with no legal restrictions on overseas investors owning property here.”
Finchatton’s also noted a 17 per cent increase in the spread of nationalities looking to buy property. The developer, which focuses on Prime Central property in Mayfair, Kensington, Knightsbridge and Belgravia has sold more to buyers from the Americas in the last year than in the previous four altogether.
Hamptons International has seen the same trend, reporting that with EU buyers shoehorned into the Prime ‘super suburbs’, it is cash-based Middle Eastern buyers accounting for one in 10 purchases in Prime Central London, followed by Russian investors spurred on by a strong rouble.
Chinese, Indian and Far Eastern buyers now account for 4 per cent each whilst continental buyers measure just 8 per cent, down from 33 per cent in 2016 in Prime London.
A potential softer Brexit following the election result, a weak pound and a low-tax Conservative government all play their part in attracting international buyers who accounted for one third of sales in London in the first quarter of this year.
“In some source markets, particularly those pegged to the US dollar, there are currency factors which also come into play which make buying in London at this time an attractive proposition,” says Ms Naylor.
“Finchatton’s marketing efforts attract both international and domestic buyers and often it’s the fact that London has such unrivalled cultural, social and educational opportunities that motivates buyers,” she adds.
“We have seen more of a weakening in the currency in the short term and that’s more of an advantage for overseas investors,” Fionnuala Earley agrees residential research director at Hamptons International. Speaking to the Ham & High prior to the election, Ms Earley argued that a Conservative majority would provide more stability for the housing market.
“I’m not sure anything has changed significantly,” she says now.
“London has always been and always will be somewhere that’s safe to invest your money because of the legal situation and because of the constitution and democracy and the Parliament, it’s a safe, stable place to be.”
Ms Earley is sanguine about the market given the shaky start to Theresa May’s second government, although she argues that the election result is less important than the impending Brexit negotiations.
“I think what a minority government and the surprise outcome of the election has done will make people feel a little more unsettled about how Brexit might work because effectively it’s all really about Brexit,” she says.
“In terms of the outcome for the housing market as a whole, I don’t think anything really has changed significantly.”
Ultimately, it’s a waiting game, Ms Earley adds. “As we go through these negotiations we will get a clearer idea of what the markets think of the UK’s economic stability and our potential to grow more quickly and that will have an impact on the currency too.”
Should Brexit negotiations go to plan, a stronger pound will mean that UK buyers begin to stir in the Prime markets again and London will become less attractive to overseas investors who failed to swoop in when the tide was high.
So, is Maida Vale set to be the new Marina Bay Sands? That will ultimately depend on how well Mrs May negotiates.