Emiratis buying up property in the UK

UAE buyers are playing an increasingly important role in the international frenzy to buy property in central London. Emiratis were the second-largest group of foreign buyers after Russians.

International buyers now account for 55 per cent of sales in prime central London. Suzanne Plunkett / Bloomberg News

LONDON // UAE buyers are playing an increasingly important role in the international frenzy to buy property in central London.

Emiratis were the second-largest group of foreign buyers of million-pound properties last year after Russians, according to new research by Hawker Beechcraft, a US manufacturer of business aircraft.

While Middle Eastern investors, especially Qataris, have long been involved in London property, the number of buyers from the UAE has been steadily increasing in recent months, agents say.

"We sense there is more confidence coming out of the UAE as the economy stabilises," said Black Brick, an estate agency, in a recent report. UAE investors are demonstrating "a renewed desire to hold a diversified international property portfolio rather than one overly concentrated on local new build development", the report said.

International buyers now account for 55 per cent of sales in prime central London, compared with 49 per cent a year ago, Knight Frank reports. The international interest has helped to push prices up 11.4 per cent in the past year, 5 per cent higher than the previous peak in 2008, Knight Frank data shows.

Russian, Asian and Middle Eastern buyers have led the surge, which has been fuelled by low interest rates and favourable exchange rates, estate agents say.

The large inflows from foreign buyers contributed to an increase in flights to London's main business airports, including Biggin Hill and London City, Hawker Beechcraft reports.

London remains a haven for Middle Eastern investors as the Arab Spring takes its toll on business confidence in the region, Hawker Beechcraft's data shows. In Britain, with government spending slashed and jobless figures rising, individual and sovereign wealth investors from overseas are increasingly targeted for their purchasing power.

Emiratis bought an estimated 198 properties each worth more than £1 million (Dh5.9m) in London last year, making a total investment of almost £320m, said Hawker Beechcraft. Total purchases by non-UK nationals was £3.75 billion last year, the aviation company said.

"As one of the most desirable cities in the world, it's no surprise that London's property market is attracting a large number of overseas buyers," said Sean McGeough, Hawker Beechcraft's president for Europe, the Middle East and Africa.

"Given that many of these individuals lead busy lives and often travel a huge amount, this helps explain the rise in flights to London's business airports," Mr McGeough said.

Between January and September this year, the number of business flights to Biggin Hill, London City and Farnborough increased by 46 per cent, 38 per cent and 34 per cent, respectively, said Hawker Beechcraft. It analysed data from Eurocontrol, which coordinates Europe's air traffic control systems; the estate agency Knight Frank; and the Land Registry, a record of UK property transactions.

"These numbers tell us things are improving. People are getting out there and doing business," said Mr McGeough.

"It's the first time we've done research like this, and we're always trying to find metrics to help us know where to focus on. The UAE looks like the best bet, but there is also Bahrain, Jordan, Kuwait, Lebanon and Saudi Arabia." Hawker Beechcraft said Russian nationals topped the list of foreign buyers by country, having acquired an estimated 266 prime properties last year worth about £429m.

Europeans excluding UK nationals accounted for about £1.57bn worth of property purchases individually worth £1m or more in London last year, for a total of 974 properties. This was followed by nationals from the Asia-Pacific and the Middle East, with 640 and 298 properties purchased, respectively.