UK real estate investment flows from Russia are draining, falling from the top list

uk-property-investment-flowsThe Russian investors activity in overseas property market, and UK  in particular, is switching from the path of rapid growth to accelerated falling. Most potential investing customers receive salaries in local currency, and along with the sharp decrease of the Russian economy the price for the real estate has risen by 50% in less than 2.5 years. In addition to the price of the available options, significantly increased the cost of maintenance of apartments and houses, and naturally, the cost of conveyancing solicitors services.

The state of affairs is most probably going to have a long-term effect. The dynamics of the economy in projection on overseas property investment is pre-determined for at least the next year. The economic situation, in turn, is largely dependent on the foreign environment, the continuation or termination of sanctions, the dynamics of national currency fluctuations and the of oil prices. However, the situation may not change significantly as the demand for overseas property from Russians is expected to rest at the same level due to capital transfer from the country. Firstly, a large part wealthy Russians is interested in foreign trade of real estate, including those that hold savings in more stable currencies or paid in foreign currency. The fall of the ruble does not negatively affect them. Secondly, there has been a change of priorities recently. Previously, the majority of customers considered buying resort property for their own leisure in Spain, Bulgaria, Montenegro, but now such purchases are declining, and emerges a larger group of buyers who buy real estate for investment objects. By investing in profitable real estate individuals and businesses are traditionally trying to diversify their assets, to protect themselves from hazards and create a ‘reserve airfield’. Thirdly, through foreign real estate agencies specialising in the Russian customers real estate is oftentimes purchased by citizens of other CIS countries, such as Kazakhstan. Their purchases are sometimes credited as ‘Russian’ and technically affect the performance demand.

A look into the 2016

So what trends will be see this year? The process of Investing in profitable real estate liquidity of stable economies will increase. The most significant reason for Russians customers acquiring overseas property is political and economic stability. These factors are important for home buyers in the UK and Germany: this reason was noted by 82 and 76 per cent of respondents, respectively. After stability comes the climate, this is where the United States and France are leading the race, while in the United States this factor is considered in conjunction with price (52.8% of respondents). Interestingly, when Russian problems in the economy emerged, a surge in interest in the real estate options of the following countries was observed: UK, Germany, USA, France. In November and December 2015 it was recorded an increase in demand for profitable real estate. The Russians are in a hurry to invest surplus funds amid rising dollar. Up to 30% of buyers purchased overseas property for investment purposes. In addition, many foreign objects purchased to create a ‘reserve airfield’.

The Lucrative Real Estate Investment Areas In London By District

The most promising areas for investment in London real estate in the current market are Battersea, Nine Elms and Vauxhall, as these areas are focusing on long-term, really financially attractive projects. In Battersea and Nine Elms a whole neighborhood is erected, here in just 10 minutes of walk you can reach Sloane Square in Chelsea. On the one hand it’s an expensive offer, but on the other, buying an apartment in London, in the new district, where 90% of the objects represent luxury housing, is the dream and goal of many. In addition, the area is very close to Chelsea, so the demand is very high, too.

london investment areas

The most famous and popular areas of London outside England are Chelsea and Belgravia. Not surprisingly, prices in Chelsea always grow, because the demand for apartments in Chelsea exceeds supply, and the interest of international investors to the maximum. Successful bankers and brokers in London give their preference to invest in real estate in Chelsea, and their families love this area for endless shopping opportunities, cafes and designer boutiques. The areas of Chelsea and Kensington boasts half of the 100 most expensive streets in London. For example, Kensington Square is the UK’s most expensive street, this is where the average price of real estate equals 5.5 million pounds.

It is also considered to be advantageous to invest in real estate area of Battersea, thanks to a good location, as well as a number of aspiring construction projects. Battersea is also considered one of the best areas in central London and has a gorgeous location on the River Thames. Over the past three years, the area scored the highest price of population growth in London. Currently, the area is planned for massive restructuring and by 2020 it is expected to actively rise in price of real estate. In addition, the planned construction of two new metro stations, eight complexes with restaurants and shopping centers is also approved.

The demand for new buildings in prime London was always greater than supply, so in these areas no new premises are built according to conveyance solicitors reports, although suddenly you may get lucky, and you will be able to buy an apartment in a small building in the prestigious location. For example, over the past 10 years, the first new premium in this area was Vicarage Gate in Kensington.

In central London, Liverpool Street was one of the first areas to be updated, so it is worth paying attention to this area of London and its surroundings. According to forecasts in five years the cost of real estate in Liverpool City could increase by 23%. Also the number of projects is actively constructed in the quarter of London Bridge: new homes, shops and business centers pop out.

The most promising area in south-east London is Greenwich. Experts say that real estate in this area will increase in price by 19.4% over the next five years. In the north-east of London one of the most promising districts is Stratford, where the 2012 Summer Olympic Games were held and around 2800 housing units have been built. According to experts, in the area prices will rise substantially, as in Greenwich, by 19%.

London Outperforms Paris In Terms Of Elite Property Sales

Luxury property in London is sold more frequently than in Paris. Although French capital is around 4 times smaller in terms of population (8.6ml in London vs. 2.2ml in Paris), London has been its rival for long centuries. Two of the largest Western European metropolis have much in common. But when it comes to real estate, these two cities stick to very different development paths. Sales in the upper segment of the real estate market rose by 121% from December 2005 to June 2015 in London, while the identical mark in Paris is estimated at just 60%.

london-luxury-real-estateAccording to market analysts, this difference is explained by the fact that London demonstrates way more impressive results in terms of business and economy development: the city generates approximately 23% of the country’s annual GDP. London is often seen as a haven for capital for wealthy people from around the world, and Paris is a no match to England’s capital in this regard, which is confirmed by a variety of factors. English is a recognised international language, a high concentration of financial institutions in the United Kingdom and the tax status of ‘non-residents’ are attracted to the British capital paid professionals and successful businessmen from different countries.

However, the introduction of stamp duty in December, 2014 has made the purchase of the houses in London even more costly. A slowing economic growth in China and the decline in oil prices has led to some reduction in demand for prime London real estate from foreign buyers as reported by numerous respected conveyance solicitors agencies. As a result, the amount of acquisitions in the most expensive districts like Knightsbridge, Belgravia or Mayfair is gradually reducing. In October, the agency Knight Frank has reduced the growth forecast for the elite of London property market for 2016 from 4.5% to 2%.

Savills agency analysts say London prices for elite real estate are reaching the maximum. At the same time, elite real estate in Paris still has potential for appreciation. An increase in pricing for the most expensive real estate objects in French capital has stopped after the victory of Francois Hollande in the presidential elections and the introduction of the wealth tax. Today, the cases when unique historical houses for sale do not find their buyers are quite frequent. The total volume of transactions has declined in 2012.

What can you expect in the future? In Paris, the negative impact on the real estate market is provided by the laws governing the procedures of renting apartments and houses. The vast majority of property owners in the capital – the French, do not appreciate the restrictions on their property. In London, foreign players in the real estate market are big players in the market. Given the fact that the number of dollar millionaires and billionaires in developing countries is growing much faster than in Europe and the US, we can predict an increase in demand for the elite property in London.