It seems that not all UAE based investors are concentrating on snapping up off-plan realty in Dubai. Quite a number are heading to London to look out for bargains in the UK.
According to research from Cluttons, since Eid there has been a surge of interest in London homes from investors based in Sharjah, Oman and Dubai. They are mostly interested in homes priced between £800,000 and £3 million (Dh3.7 million to Dh14.2 million).
Surge in second homes
The report shows that these buyers are mostly looking for second homes and clearly prefer brand new builds or those properties with completion dates of between six months to a year.
It’s assumed that London house prices will start rising again at some point, and Middle Eastern buyers are hoping to capitalise on this by snapping up property now.
While research from the Dubai Land Department shows that investors from the Emirates ploughed Dh15 billion into different kinds of property in Dubai in the first six months of 2017, they still have a preference for property in London.
This interest in London property could give them a great return if and when London prices start to leap again, but these investors aren’t benefiting from the same currency benefits that existed in the last six months of 2016.
Brexit benefits closing
The second half of 2016, following the vote to leave the EU in June, saw a 17% drop in the value of the pound, leading to unprecedented investment opportunity from overseas buyers. However, the gap has now closed to around 11%, meaning this post Brexit opportunity has begun to lessen. It’s likely that this closing gap is why many UAE investors have snapped up opportunities recently.
In another break from past form, investors aren’t just putting money in to key central London areas (such as Kensington, Chelsea and Westminster). It looks like the outer regions of London suit just as well, as long as they can get what they want.
This further explains the price range of £800,000 to £3 million on average, which is quite different to the £5 million + average of acquisitions made by Middle Eastern buyers in London properties between 2010 and 2014.
About Samir Salya
Samir Salya is the Chairman of Reign Holdings, and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.