The weakness of sterling has helped foreign buyers enter the prime central London market, according to Knight Frank analysis.
The agent’s Spring London Residential Review said a US buyer moving to prime central London would have benefited from an effective discount of 21% since the EU referendum last June, given currency and house price movements.
It was the same figure for an Indian and Hong Kong buyer, while the figure was 17% for a Chinese buyer and 28% for a Russian.
Tom Bill, head of London residential research said: “Sterling is likely to remain relatively weak versus the dollar in 2017 against the background of higher infrastructure spending, inflation and rate rises in the US.
“However, some anticipate a weaker dollar as part of a drive to stimulate US trade, a conflicting scenario that underlines how waiting for the bottom for sterling is a high-risk strategy.”
The agent also said transactions in London had picked up in the final quarter of 2016 and into the new year.
In the six months to February, Knight Frank undertook a fifth more transactions in prime central London than the equivalent period last year and 2% more than the same period two years ago, according to the report.
Meanwhile, in the lettings market there was a 20% year-on-year increase in new rental properties coming onto the market in the six months to February 2017, lower than the 37% increase recorded over the preceding six months.
Bill said: “While the performance of local markets has varied, the overall rise in the number of tenancies agreed and viewings reflects the degree of uncertainty that remains in the sales market.
“Across prime central London, rental value declines have begun to bottom out as the rate of growth in the supply of new lettings properties coming on to the market slows, which has increased the balance between demand and supply.”
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