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London homes draw overseas investors
Analysts say that now is a good time to invest in prime residential homes in London
By: Gan Yu Jia
London is becoming increasingly popular with property investors in Singapore and around the region.
The weak sterling and reduced investment options here are making the city more attractive, so much so that two of its prime properties will be launched here later this month.
Mr Julian Sedgwick, the head of international residential sales at Savills Residential, cited industry data showing that, in 2009, 5 per cent of those who bought London homes were from countries in the Asia-Pacific excluding China. Last year, the figure surged to 28 per cent.
Analysts say that now is a good time to invest in prime residential homes there.
A Savills Research report noted that from June 2009 to March this year, stock shortages and strong overseas demand pushed up home prices in London to a level 13 per cent above the highs seen in 2007.
Mr Darien Bradshaw, the executive director of CBRE's international property marketing arm for Asia, said the weakening sterling was partly behind the foreign demand.
'The sterling is expected to remain weak against most foreign currencies, which will reinforce London's position as a major destination for overseas investors,' he said.
Britain's latest budget contained extensive measures to raise stamp duties and counter stamp duty avoidance for sales above £2 million (S$4 million), but Savills said they are 'unlikely to significantly unsettle the market'.
'We believe they will not undermine market demand... to the extent that they cause sudden, deep price falls,' the report said, adding that it is common for prime markets to undergo lulls at this stage of the cycle.
One Singapore dollar, which has strengthened slightly over the past year, now buys about 49p. As a rule of thumb, just double the British home prices to get the Singapore equivalent.
Two Central London projects will be launched here at the end of the week.
Embassy Gardens on the banks of the Thames, built by British developer Ballymore Group, will be launched on Friday.
Suites from 496 sq ft on will start at £349,000. A one-bedder of 531 sq ft will start at £449,000, while a two-bedder of 729 sq ft will set you back at least £599,000.
Roman House by Berkeley Group, which is near the Eurostar terminal, will be launched on Saturday.
A 424 sq ft studio apartment will start at £570,000 and a 1,800 sq ft flat at £3 million.
Experts say the strong demand for prime residential homes has spilled eastwards from London's central districts.
International Property Advisor chief executive Ku Swee Yong tips East London as an up-and-coming hot spot, given the 'massive investments' channelled into developing infrastructure and public facilities for the London Olympics.
'The east side of London, from Canary Wharf to Greenwich, has many affordably priced apartments. Their prices have not yet risen to previous peaks,' he added. 'Also, demand for rental units in the east remains strong.'