UK residential market attracts international buyers and tenants
Data by Knight Frank reveals a record-high number of web searches for the UK property among international buyers since the pandemic hit.
Current property trends
Knight Frank is an international property consultancy that has 500 offices across the globe. Its recent data shows the share of international buyers searching for the UK private sale and rental properties reaching 24% in August 2021. Over the period from January 2020 to June 2021, the figure stood at 17% on average.
Further data analysis shows even more impressive trends. Last month the share of international buyers looking for UK rental properties exceeded the share of UK-based clients for the first time since January 2020. This demand is mostly due to two factors: the International students preparing for the new academic year and corporate tenants returning to the offices.
Tom Bill at Knight Frank highlights the emerging international demand for UK property. He expects the trend to be more evident in the following months as the return to normal becomes more real and market services start working at full capacity.
Even though the international demand is growing, the timings of the actual return of the overseas buyers are uncertain. This is mostly due to unclear perspectives on the relaxation of travel restrictions.
What caused the changes?
The pandemic has negatively affected the air traffic in the UK as the government had imposed travel restrictions and visitors had to quarantine. In July 2021, the number of arrivals at Heathrow reached the highest number since the pandemic hit. However, it is 80% below the figure in July 2019.
Private sale property. The Central London property market has seen new trends because of the pandemic-related issues. French buyers accounted for the largest share of international buyers in the prime Central London market in 2020, and some of them were already UK-based.
Rental property. As for the lettings market, there are two current trends. While some international students are already in the UK, others wait for certainty regarding face-to-face learning. This means that tenant demand might become more balanced throughout the year than usual.
However, the international demand in the UK rental properties is particularly high in areas as Aldgate and the South Bank. Gary Hall at Knight Frank points out that some London branches see over 80% share of international rental applicants.
The sales market is lagging behind the rental segment regarding the international buyers. However, property specialists expect to see more overseas customers in the following months. James Cleland at Knight Frank highlights the definite upward trend in enquiries from international buyers who want to come to the UK.
London property data and forecasts
Data by Nationwide reveals the impact of travel restrictions on London property. Prices in prime Central London increased by only 0.8% over 12 months to July 2021. By contrast, Greater London saw prices up by 7.2% over 12 months to June 2021.
As the situation stabilises and demand balances out, Knight Frank expects property prices in prime Central London to go up again. It predicts a 2% increase by the end of the year and a 7% increase in 2022.