Why Indian investors are so important to London property


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One of the biggest forces in the overseas property sector is investors from India and with the strengthening of UK and India economic ties, real estate sales are also set to benefit.

That’s the prediction of Vic Chhabria, Director of London-based boutique agency, Rescorp Residential, which sees half of its overseas sales coming from Indian buyers.

The recent visit to the UK by India Prime Minister Narendra Modi, which led to more than £9billion in commercial deals being agreed between India and the UK, will further encourage property investment from Indian buyers looking to set up their businesses in UK, says Rescorp Residential.

Mr Chhabria says, “I strongly believe that the property market will benefit hugely from this historic partnership between the two countries, which is set to act as a catalyst for multi-million investments into Prime Central London. Indians are set to become one the most important buyers from the emerging countries in the near future and this positive collaboration will mark the beginning of an exciting new chapter for both countries.”

London is at the top of the list Indians hoping to buy property abroad and has retained its position as the most attractive economic powerhouse in Europe and a global financial hub for investors worldwide.

Indian buyers typically hold strong emotional, cultural and personal ties with the UK as they are were educated there, have family in the country or fall into the “staycation resident” category and visit London two or three times a year.

Over the last five years, Indian buyers have become a leading force in the London residential property market, says Rescorp Residential.

Land Registry data shows that in 2014 Indian buyers spent an estimated £1billion on London residential property – more than double the £450million in 2013 and £290million in 2010. Indian purchasers are now the second largest overseas buyers of homes priced above £5million.

Vic Chhabria explains, “Prime Central London has become one of the most popular destinations in the world amongst affluent Indian families who have snapped up properties in some of London’s important residential areas. St. John’s Wood, Mayfair and Marylebone are the most sought after addresses by our clients, with Indian buyers accounting for an estimated 15% to 25% of all sales annually in each district.”

During the first two quarters of the year, demand from wealthy Indian investors in the London property market plateaued, given the uncertainty surrounding the election results, but the Conservative victory reignited Indian’s interest in luxury London property.

India invests more in the UK than the rest of the entire European Economic Community put together and investments have risen by 65%, making India the third largest source of direct foreign investment. This is particularly important as India is destined to become the world’s third largest economy by 2024.

Rescorp Residential has seen a big shift over the last two years in the rise in Indian buyers purchasing homes for investment rather than personal use. Almost 60% of the properties the firm has been selling over the last 12 months to Indian buyers have been bought purely for investment purposes, with the majority of these investors originating from Delhi and Mumbai.

Mr Chhabria says, “The Indian buyer market in London has matured and become increasingly sophisticated and important. Now the market has expanded from family homes into the pied-a-terre and investment markets. Purchasers are typically from an affluent background and are looking to acquire an apartment that complements their busy social calendar.

“St. John’s Wood in particular is attracting a large group of Indian urban young professionals, who are typically 35 years old, have family wealth behind them and work in the City of London, primarily in the financial sector. They are usually looking to spend between £1.5million to £3million on an apartment providing two or three bedrooms.”

Rescorp Residential, which was founded in 2008, operates across St. John’s Wood, Belsize Park, Mayfair, Maida Vale, Little Venice, Hampstead, Primrose Hill, Marylebone and Swiss Cottage.

 

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