Luxury homes in London that nobody wants to live in

London HousesIt is well documented that more wealthy overseas buyers are investing in residential property in London as the market is seen as a safe haven for their cash. So it was interesting to see reports at the weekend that almost a whole street in one of London’s wealthiest areas has luxury properties lying empty because their foreign owners have left them or have been unable to afford their expensive upkeep.

Extraordinary is the word that comes to mind regarding the situation in The Bishops Avenue in leafy Hampstead in north west London which is often referred to as Billionaires Row. It is estimated that at least 16 palatial homes are currently unoccupied with some rotting and decaying as they have not been lived in for years.
Indeed, according to residents only three homes in the road are actually lived in all the time as many are owned by rich foreigners who live abroad most of the time. One property has been repossessed and a group of 10 houses have been empty since the 1990s after being bought by members of the Saudi royal family who never used them. They have now been bought by a property development company and are being renovated.

But the sheer sky high prices for properties like these in desirable locations in London means that many of these homes will again be bought by wealthy overseas buyers. Homes in the street are currently on the market for £30 million, £65 million, £40 million and £34 million. It will be interesting to see who ends up buying these properties. Asian buyers are the most likely. Certainly buyers from China have been increasingly snapping up properties around the world due to the limited opportunities for investment in their own country.

The latest research shows that mainland China and Hong Kong are the second largest source of cross border real estate investment in the world after the United States. In 2013 to date, $23.7 billion cross border investment has flowed from China and Hong Kong. Money invested directly from Hong Kong is now down 42% on 2007 volumes, but Chinese direct investment is up 1165%. Chinese buyers with overseas business interests were among the first to invest abroad, followed by a second wave of buyers seeking property for their offspring often bases for student children, or to achieve permanent residency.

These buyers sought out established, international markets in jurisdictions that have cultural ties with China or with a large Chinese migrant population. Hong Kong, Macau and Singapore, have been followed by other top tier global cities with Chinese diasporas such as Vancouver, London and Los Angeles. But these kind of mega expensive houses for sale in Hampstead do not really match the criteria being sought by Chinese property investors. Agents who sell regularly to Chinese buyers report that they like city centre properties, near the River Thames and Universities, and usually new build apartments that their children can use while studying and which can then be let to create an income at a future date.

Commentary by Ray Clancy – Editor of Propertywire

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Posted by: Samantha Turner-Meyern Categories: Property Market, Property News, Uncategorized Tags: , Comments Off on Luxury homes in London that nobody wants to live in

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