House prices soar as rich buyers from abroad snap up homes in expensive areas of London

By Hannah Neary, local democracy reporter

House prices in continue to soar as rich buyers from abroad return and snap up homes after the easing of coronavirus restrictions.

Wealthy jet-setters are adding to the highest rise in property prices in London’s most expensive area since 2015.

The price of an average home in prime Central London has risen by 1.2 per cent since the beginning of this year, according to estate agent Knight Frank.

The areas classed as ‘prime Central London’ vary according to different estate agents but generally the term refers to Westminster, Kensington & Chelsea and parts of Hammersmith & Fulham and Camden.

Local rent fees are also rising steeply – the average rent value grew by 4.2 per cent in the three months to October – the highest rise since March 2011.

The number of new prospective buyers registering in London was 56 per cent higher in October 2021 than in October 2020.

Tom Bill, Knight Frank’s head of UK research, wrote on their website: “The landscape has changed significantly over the last six years – politically, fiscally and in just about every other way since the pandemic struck.

“A succession of uncertainties has kept downwards pressure on prices since they peaked in summer 2015.

“The prime property market in London now appears to be gradually emerging from this tumultuous period.

“We are not on the verge of the sort of dramatic double-digit bounce-back in prices seen after the collapse of Lehman Brothers in 2008.

“But the prime London property market is resuming an overdue recovery that was interrupted by the pandemic.”

He told The Guardian: “People from all over the world are coming back to London, people from the Middle East, Europe, the same roster of countries you would expect.

“They are back in London in much greater numbers and looking for homes, but there is uncertainty about rising Covid case rates.

“There is a sense that buyers who put everything on hold, are coming back on the path to buying.”

Emma Dent-Coad, a Labour councillor for Westminster City Council said: “Rising house prices do nothing to help long-term residents, or indeed people wishing to buy to live in the borough.

“Buyers from around the world park their money in places they are convinced will increase in value.

“We could be inflicted with yet more high premium empty homes.

“The government must take their fingers out of their ears and tackle this shameful and damaging international poker game, which always affects the most vulnerable first.”

A spokesperson for PricedOut, a campaign group for affordable housing in England, said: “Increasingly unaffordable house prices and rents are the natural result of a city that has failed to build enough for decades.

“Investors are attracted to London precisely because our planning system keeps prices artificially high – they are a symptom rather than a cause of the crisis.