Bonjour, London!

By Harry Brown

2020 was supposed to be the year that the U.K. began to distant itself from old allies and welcome in a new dawn on a Global Britain in which investors from all over the world were welcome. It hasn’t quite panned out that way yet, especially in in the Prime Central London (PCL) property market.

Despite forecasters predicting the European market would remain stagnant this year, it is in fact our neighbours from across the channel who are the largest group of foreign buyers in London’s wealthiest districts.

New Knight Frank data released recently shows that property purchasers from France have made up one of the largest groups of buyers for prime spots across the capital.

French buyers accounted for 11% of international sales of the capital’s luxury homes through September, leaping from 2% during the same period in 2019. That’s a fundamental shift from the previous dominance of Chinese buyers, who have slipped to fourth in the ranking behind Hong Kong and U.S.

Despite the background noise of Brexit, the combination of a weak pound, a looming stamp duty holiday deadline and less competition from global investor, 2020 has created a near perfect situation that many super wealthy investors from France couldn’t ignore.

Knight Frank has even suggested that Euro-denominated buyers have benefited from an effective discount of 30 per cent on PCL property as a result of currency changes and house price movement.

Furthermore, the effect of COVID-19 has meant, from a logistical standpoint, that competition from buyers further afield has dwindled. The inability to view properties has negatively impacted prominent buyers from markets such as China, the Middle-East and Russia. Buyers from such markets are traditionally keen on visiting and viewing properties before purchasing, something they haven’t been able to do due to travel restrictions and lockdowns.

French buyers on the other hand are able to go from Paris to London in under two hours, meaning day trips to view potential properties have remained a possibility, and will likely increase again once the current lockdown measures are released.

The ability to view properties, a slash in the prices and lack in competition has meant despite the previous predictions of us saying ‘au revior’ it is in fact ‘bonjour’. It will be interesting to see if this is just a minor blip in market predictions bore out of the Covid pandemic, or whether political uncertainty and a weakening pound means our neighbours from across the channel will continue to look to London as a sound investissement.