London house prices are being “propped up” by overseas buyers and international investors. Jeremy McGivern of prime London property sourcing agency, Mercury Homesearch, tells us: “Over 70% of London buyers spending £5 million or more on property comes from overseas. Whether it’s from the Middle East, Russia, Europe, India or China, they’re all looking for safe places to park cash outside of their own countries.”
McGivern adds: “In relative terms, London property is cheap because our currency has been such a dog. To a euro holder, even if London prices are flat, they’re down 20% by the time you adjust the currency.”
One thing which could hurt London prices, believes Frisby, is a strong pound, as this could drive away many of the overseas buyers. He writes: “I’m not as bearish as I once was on sterling. So I’m looking for falls, certainly versus gold. Who knows? One day you may even get on the Knightsbridge property ladder for a mere 1,000 ounces.”
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