James Bailey, Managing Director of Henry & James, one of London’s elite property agencies, shares his insights about the nature of the London property market with us, focusing particularly on the dynamics affecting international buyers.
For a while now, we have seen the Greek, Italian and the French buyers seeking to buy in London. Even before them, we were seeing Russians redefining the market in their quest for trophy homes. What we have not seen for a while – for a very long while, in fact – are American buyers. That has begun to change.
Prior to the start of the financial crisis, we had a steady stream of Americans but many were seeking to rent, not buy. They were here on short to medium term expat packages with the major investment banks and wisely avoided buying as they knew they would not be putting down roots in London. As the economy started to improve, we, at Henry & James Estate Agents saw a major increase in the number of corporate tenants of all nationalities but unless they had some other connection to London, Americans made up only a small percentage of prime central London buyers.
Recently, however, we launched an eight million pound home on Victoria Road. On the day of its launch, we had 10 carefully selected buyers arrange viewings. Of these ten buyers, four were American. This is not an anomaly, either. We have seen the number of American applicants on our books quadruple in the past year. Some of them are on short to medium term secondments but see prime central London property as a sound investment. Rather than renting, they are buying as part of a diversified portfolio of investments. Some are even renting their primary home at their company’s expense but opting to purchase buy-to-let properties in the capital. They see Britain as a safe haven outside the Eurozone and are confident in property’s future growth potential.
We are also seeing another type of Americans who are coming here on a much longer term basis. The British government has made it easier for investors to gain visas if they invest a significant amount of money into British equities or other companies. Keen to take advantage of non-dom status, these Americans are often entrepreneurs or independently wealthy. As global citizens, basing themselves out of London makes sense as the capital provides the perfect geographical and financial centre to access much of Europe, Russia or Africa but still within easy reach of the US.
Even American politicians seem to recognise the impact of US citizens on our shores. In 2008, one of the Obama campaign’s most successful fundraisers was here in London amongst American expats. Mitt Romney recently tried to replicate his rival’s success by hosting fundraisers of his own back in July. By some accounts, he raised as much as $2 million during his brief stay, such is the political and financial power amongst Britain’s 250,000 strong American expat community.
I think we will soon start to see Americans as a major influence on the London property market. Our language, business practices and even our high street brands are familiar to them yet some might argue that Britain offers greater opportunities than their homeland.