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Foreigners Bought Half Of All London Homes Selling For Over £1 Million

Tyler Durden's picture





 

Actually, according to the first detailed estimate of international purchase activity in London by Knight Frank, the percentage of all central London homes that sold for more than 1 million pounds to foreigners in the 12 months through June 2013, was 49% to be exact. And as we showed yesterday when we put China's loan creation in the context of US and Japanese QE, keeping in mind the use of proceeds of all this newly created inside money has to ultimately go somewhere - that somewhere in this case being London and other global luxury real estate, said percentage is only going to get higher. Especially when one adds Russian, the middle east and other various regions whose oligarchs are desperate to park their money in "safe" havens.

Some other findings from the Knight Frank report:

  • Over the 12 months to June 2013, 49% of all £1m+ sales in prime central London went to foreign buyers by nationality...
  • ...however only 28% of buyers were non-resident in the UK
  • Over the two years to June 2013 51% of new-build purchases in the prime central London market were by UK residents...
  • ...across the remainder of inner London the portion was 80%...
  • ...and across outer London 93% of sales were to UK residents
  • Our estimate is that over the past two years 85% to 90% of all new-build purchases in Greater London have been to UK residents

Just as notable - foreigners love new construction: in the two years to June 2013, 69% of prime central London new-build purchases were to foreign buyers by nationality.

And here, a tangent: those two main instances of Emerging Market tremors that we have seen over the past year as a result of QE - well, let's just say that they better normalize soon, and funds resume flowing toward the EMs rather than out of them or else, the London (first) and soon after all other luxury residential markets get it...

Source: Knight Frank

 


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Sun, 02/16/2014 - 14:37 | Link to Comment kurt
kurt's picture

Max Kaiser was talking about this. It seems they buy them, don't live in them, let the maintenance go to hell and that the neighborhood "is kind of a scarey place."

If I was super-dooper rich I'd like to flush my money down a rat hole too!

Sun, 02/16/2014 - 14:50 | Link to Comment Pool Shark
Pool Shark's picture

 

 

It's Déjà vu all over again.

 Anyone remember the Japanese buying up all the American real estate in the late 1980's.

How did that work out for them? 

[P.S.: how much sense does it make to plow your fortune into a non-portable asset, knowing the western governments are going bankrupt? Just paint a target on all those houses. If you think you own it; stop paying the property taxes and see what happens...]

 

Sun, 02/16/2014 - 15:48 | Link to Comment kaiserhoff
kaiserhoff's picture

Two points.

 

1 Hot Money.

2 Foreigners always buy in at the top.

Sun, 02/16/2014 - 15:56 | Link to Comment DeadFred
DeadFred's picture

I hope they like the rain

Sun, 02/16/2014 - 15:58 | Link to Comment CPL
CPL's picture

http://www.youtube.com/watch?v=D1ZYhVpdXbQ

They can sing and dance in it, form bucket brigades in tempo and rhythm.

Sun, 02/16/2014 - 16:12 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Good example of how biflation works: QE-rich buy up local RE and drive up prices on nearly everything even as local real GDP flatlines and real incomes decline.

Sun, 02/16/2014 - 17:14 | Link to Comment Four chan
Four chan's picture

suckers.

Sun, 02/16/2014 - 17:28 | Link to Comment Hulk
Hulk's picture

your comment and avatar are a curious combination !!!

Sun, 02/16/2014 - 16:31 | Link to Comment market le pew
market le pew's picture

We've been living in the rain now for three years and thank you very much, we're off to a place with higher tax rates, compensated by much better property prices, much better climate and much better food at afforadble prices. Sounds like a fair deal to me. Until now this wasn't an option but now that the kids have left the nest it's a no brainer.

Sun, 02/16/2014 - 15:49 | Link to Comment Rafferty
Rafferty's picture

A ploy popular with Indian and Pakistani 'businessmen' was to buy a house in a very expensive London street.  Then fill the house with dozens of sub-continental families.  As the wealthy locals begin to flee the sale price goes down precipitously and the 'businessmen' buy them up.  When all the wealthy have fled and the whole street has been purchased for buttons the 'businessman' gives the tenants an offer they can't refuse, and the area is ready for gentrification again.

Sun, 02/16/2014 - 19:11 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

also known as "block busting".

Sun, 02/16/2014 - 15:32 | Link to Comment Mr Pink
Mr Pink's picture

Keiser claimed that the property taxes were less than storage costs on physical gold and they are just looking to turn their cash into assets

Sun, 02/16/2014 - 16:07 | Link to Comment linrom
linrom's picture

That show was Max at his best.

Sun, 02/16/2014 - 16:32 | Link to Comment tocointhephrase
tocointhephrase's picture

Yeah, just before the one where he mined his new crypto currency max coin. Obviously it is down hill from here on in

Sun, 02/16/2014 - 16:44 | Link to Comment kaiserhoff
kaiserhoff's picture

Who was the drunk chick who had a crush on Max, anyone remember?

Sun, 02/16/2014 - 21:04 | Link to Comment rustymason
rustymason's picture

Stacy.

Sun, 02/16/2014 - 16:05 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

Yeap and here is the story. Rich people buying houses in London and letting them rot.

http://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead

Mon, 02/17/2014 - 00:00 | Link to Comment Davalicious
Davalicious's picture

The 1952 group libel act wasn't written by the British. A certain people didn't want to be outed as a criminal cartel. Ditto for the anti-racist laws in white countries. Guess who pushed the 1965 immigration act, which abolished the national origins formula, for the USA. Written and pushed by the same group. They undermine the "natives" and bring in outsiders to keep us busy fighting amongst ourselves while they run the show.

According to ZH policy, you can't post anything which libels a group. Lenin spoke Yiddish at home. Stalin was married to a Jewish woman and his father in law headed the secret police in Bolshevik Russia. Jewish capitalist Jacob Schiff sent the Jewish Bolsheviks $20 million. They made it a crime to mention the fact that the country had been taken over by a hostile alien race. Of course they did. You can find honest assesments of what happened in Russia in contemporary secret service reports which are available in the library of congress. They aren't common knowledge because you know who controls the media.

Sun, 02/16/2014 - 14:39 | Link to Comment bigdumbnugly
bigdumbnugly's picture

ich bin ein londoner?

or maybe how do you say that in arabic?

Sun, 02/16/2014 - 15:22 | Link to Comment Solarman
Solarman's picture

Allahu Akbar?

Sun, 02/16/2014 - 14:41 | Link to Comment Sudden Debt
Sudden Debt's picture

what I don't understand is why a city where it rains 300 days a year is so popular.

And their food...

I mean... I'd rather live in Marseille for example.

Sun, 02/16/2014 - 14:59 | Link to Comment TheBoyPlunger
TheBoyPlunger's picture

I spent a few days in London. I'll never go back.

Sun, 02/16/2014 - 15:03 | Link to Comment Mad_max
Mad_max's picture

Please refer to it by its proper name - Londonistan.

Feel the enrichment.

Sun, 02/16/2014 - 15:13 | Link to Comment max2205
max2205's picture

London latitude is up there near alaska....when the gulf stream changes that's where they will store meat

Sun, 02/16/2014 - 16:12 | Link to Comment linrom
linrom's picture

Now there is speculation that jet stream flow is also changing. The combined effects of gulf stream and jet stream changes could turn England to frozen tundra which coincidentally is thawing out due to warmer temperatures.

Sun, 02/16/2014 - 17:08 | Link to Comment TruthInSunshine
TruthInSunshine's picture

London today has some of the best restaurants in the world. All the financial sector money created a demand for the best food at any price, since the entirety of the British banking sector is essentially taxpayer subsidized (as is America's banking sector and as is, especially, Wall Street on Manhattan).

I have been to London a dozen times in the last 8 years, sometimes for as long as a month. The London club scene is hopping, powder cocaine is EVERYWHERE, and there are 150,000 USD to 300,000 USD cars/SUVs everywhere.

The city is essentially vertical, so that anyone who wants to work near a London located business is going to pay nosebleed prices for a glorified apartment with a doorman, like Manhattan, only probably 1 1/2 to 2x as much per square meter.

Oh, and London has a booming defense industry/arms trade. At high end cocktail parties, the big money people either work in finance, real estate development, biotech or "arms/munitions."

The further you great from the corrupt & taxpayer-siphoning city center of London, the further depressing things become, and the further beaten down & "surrendered" to their "bad luck" and "bad lot in life" people become in to e and attitude (Britain has historically been something of lucky sperm club/caste-lite society; the opposite of America's Horaratio Algier bootstrap mythical one).

I hate London because it not only reflects every disgusting, incestuous, taxpayer sucking thing that Wall Street/NYC do, but more so, as it's the original model of how a private bank cartel literally buys off & deeply captures an allegedly representative form of "elected" government.

Sun, 02/16/2014 - 17:26 | Link to Comment css1971
css1971's picture

Yup... Spot on. The City has basically devastated the rest of the UK economy. As you travel north and west away from London in Britain you get asymptotically closer to zero wealth.

What's fascinating is how few British have figured out their wealth is being sucked dry by The City.

Maybe why Scotland wants out.

Sun, 02/16/2014 - 15:47 | Link to Comment kaiserhoff
kaiserhoff's picture

I spent two months in London one week,

  over Christmas, no less, and yes, there was pussy involved.

Sun, 02/16/2014 - 15:10 | Link to Comment Mad_max
Mad_max's picture

Londonistan is full of foreigners. So any complaint about food cannot be directed at us English.

Now I'm off to have some fish and chips.

Sun, 02/16/2014 - 15:39 | Link to Comment williambanzai7
williambanzai7's picture

T-A-X-E-S or the absence thereof...

Sun, 02/16/2014 - 15:52 | Link to Comment Rafferty
Rafferty's picture

I'd rather live in Marseille for example.

 

You do realized that the Religion Of Peace is now ascendant in Marseilles?  It's almost majority Muslim, unlike London.  Oh wait a minute.........

Sun, 02/16/2014 - 16:04 | Link to Comment linrom
linrom's picture

He is from Belgium, that's new independent state of Palestine, a result of Israeli-Palestinian peace talks. He is right at home.

Sun, 02/16/2014 - 17:18 | Link to Comment css1971
css1971's picture

London would be the 6th biggest city in France by French population so the French disagree with you, and British food has come a long way; London is just behind Paris for Michelin stars, then you have the imigrant cuisine; Indian is of particular note, Lebanese, Greek, French, you name it.

Why live in London? Money. That simple. If you want money you need to be close to the source of the inflation, and the source is The City.

Sun, 02/16/2014 - 15:08 | Link to Comment Colonel Klink
Colonel Klink's picture

Money laundering at it's eliteist!

Sun, 02/16/2014 - 17:40 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Elite Wealth on the Run:  Foreign aristocrats, dethroned royalty and despots run off to London, park their money there and take on global residency.  London, NY, etc.

There's nothing more respectable than dirty money and blood money that had been properly aged some decades or generations.  Like a good wine, it seems to only improve with age.

Sun, 02/16/2014 - 20:43 | Link to Comment Colonel Klink
Colonel Klink's picture

I think we need to uncork some of the aristocratic blood for their lesson to be learned.

Sun, 02/16/2014 - 15:09 | Link to Comment muleskinner
muleskinner's picture

People from the US emigrate to Dubai or Thailand or Chile.  People from China move to the West Coast and Vancouver.  People from the ME move to London. 

Canadians move to The Yukon.

You don't have to travel around the world to understand that the sky is blue everywhere - Johann Wolfgang Goethe

Cubans move from one tobacco field to the next tobacco field while they drink their rum and rhumba boogie.

Are we there yet?

 

Sun, 02/16/2014 - 15:15 | Link to Comment pragmatic hobo
pragmatic hobo's picture

blow off phase of global liquidity bubble ...

Sun, 02/16/2014 - 15:24 | Link to Comment buzzsaw99
buzzsaw99's picture

Better to be poor in Phoenix than rich in London.

Sun, 02/16/2014 - 16:37 | Link to Comment tocointhephrase
tocointhephrase's picture

Cos you have tried both and four green arrows. Some real loser bums on here today.

Sun, 02/16/2014 - 15:25 | Link to Comment starman
starman's picture

What could possibly go wrong?! Plenty fools left on this world!

Sun, 02/16/2014 - 18:55 | Link to Comment kaiserhoff
kaiserhoff's picture

Well banks uber alles worked so well for Ireland, and Iceland, and derivatives have been just ducky for Duestche Bank;)

Tail, meet Dog.

Sun, 02/16/2014 - 15:31 | Link to Comment RaiZH
RaiZH's picture

I need to get out of the London, the commute from the suburbs into central is just terrifying and walking past empty & sold £1 million + flats everyday just takes the mick. 

Worst thing of all - we don't even have basements over here. I live in a box. 

Sun, 02/16/2014 - 17:05 | Link to Comment css1971
css1971's picture

London is a young man's game. I lived there for a number of years before leaving.

You make your money there due to the insane levels of inflation, then move back out to somewhere sane to live and buy a better standard of living for yourself.

Sun, 02/16/2014 - 15:40 | Link to Comment Jack Burton
Jack Burton's picture

Great new luxury flats are being built along the Thames, the market is mostly aimed at Chinese and rich oil state Arabs. It is a way to get money out and into safe havens. The UK and London aim to be a world safe haven for money and for banking fraud. The secret services, the military and the vast London police organization is tasked with protecting the new money coming to London. Lack of regulation in finance is aimed  at making the " City of London" a safe haven for financial engineering and bank fraud". You will note, that much of the subprime meltdown was engineered in London where no rules existed, also, the derivatives fraud is centered in an unregulated banking haven inside the City of London. The Cameron government is doubling down on financial fraud and considers it the future of economics. London growth is meant to be based on a safe haven for fraud, so far, for the elites, it is working very well. So, expect bigger financial disasters in future, for no matter how smart London bankers claim to be, they are not smart, they are criminal. There is a difference, though they would never admit to it. Cameron is a banker's tool and dupe, but it is not as if he does not know just what game he is playing at. FRAUD!

Sun, 02/16/2014 - 17:44 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Given that the UK produces bugger all that the world wants, the City of London would have lost it status as one of the world's top banking centers long ago, had it not been for the constant influx of ill-gotten money and wealth.

Now, if only the folks in Frankfurt learned to attract that same kind of clientele... London would crumble very fast.

Sun, 02/16/2014 - 19:49 | Link to Comment scraping_by
scraping_by's picture

They don't read the right fiction. John Le Carre's post Cold War novels were all about London private bankers laundering dirty money, usually from Russia.

Now, if Le Carre had put in a scatalogical subtext instead of a religious one, maybe they would have twigged earlier. But, no...

Sun, 02/16/2014 - 22:32 | Link to Comment tony wilson
tony wilson's picture

old book but a great one maybe 60 years old but still true.

The Empire of The City

By E.C. Knuth

 

The colossal political and financial organization centered in London, known as "The city," operates as a super-government of the world; and no incident has occurred anywhere in the world without its participation in some form. Its pretentions are supported in the U.S. by the secret International Pilgrim Society, sponsor of the Cecil Rhodes "One World" ideology which was launched about 1897.

http://www.hiddenmysteries.com/xcart/Empire-of-The-City.html

 

Sun, 02/16/2014 - 15:41 | Link to Comment BobRocket
BobRocket's picture

It was true up till july 2013 that inflow money was buying property in London because to an outsider it was cheap (£ down due to QE) however the £ is now rising and that property is no longer cheap if you are on the outside (UK QE winding down, QE everywhere else still going full tilt).

This is investment grade capital being mis-allocated (and yes, it will all end in tears)

 

On a side note, all those M+ houses being bought used to be 3M+ houses, it is the firesale prices of mansions that is raising the average price of houses (as opposed to the price of an average house (which in the UK is one step above a hovel))

 

Sun, 02/16/2014 - 15:48 | Link to Comment JDFX
JDFX's picture

I used to live near to London, and visit now and then. Get pissed up and catch the milk train home. 

Too much traffic, too many people. The opposite of how humans should live. I now live in a small coastal village,lowest crime rate mainland UK, population 640. Sea views and hill views, and the people say hello ! 

Get out while you can.......

 

Mon, 02/17/2014 - 14:15 | Link to Comment Tinky
Tinky's picture

Is Doc Martin really that caustic when you see him for a check-up?

Sun, 02/16/2014 - 15:52 | Link to Comment Magnum
Magnum's picture

And if you have ever been to London you would know why.  My favorite city in the world...

Sun, 02/16/2014 - 19:13 | Link to Comment drstrangelove73
drstrangelove73's picture

As Dr.Johnson said"...if one is tired of London,one is tired of life.."

Sun, 02/16/2014 - 19:31 | Link to Comment brucyy
brucyy's picture

I love it too. and if others don't , well. boo fucking hoo.

Sun, 02/16/2014 - 15:56 | Link to Comment joego1
joego1's picture

Good, As long as they stay away from here they can have their "safe haven".

Sun, 02/16/2014 - 16:12 | Link to Comment q99x2
q99x2's picture

People with money are worried and if the SHTF crypto will get hit as well as most everything except FOOD, GUNS and AMMO, INSULIN and GLUCOSE TEST STRIPS, etc. And, Gold and Silver may be used for bribes.

Sun, 02/16/2014 - 16:31 | Link to Comment Sufiy
Sufiy's picture

Bubbles are everywhere, they have to buy something ... Bitcoin is going down in history as the vapour currency and Gold is breaking up now.

 

Bitcoin plunges 50% on Mt. Gox to hit USD230 as troubles continue

 So much for the store of value and "Gold 2.0": Bitcoin continues its troubles now related not only to the herd mentality chasing the bubbles, but to the fatal flaw in the core of it praised crypto-currency architecture. Meanwhile the real and one only Gold is breaking out with topping $1,322 intraday. Realisation that there is no substitutes for Gold will be another factor to ignite this new Gold Bull leg. China was first here again and bought record amount of 247 tons of Gold in January.

 

http://sufiy.blogspot.co.uk/2014/02/bubble-chronicles-drug-site-silk-roa...

Sun, 02/16/2014 - 16:35 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Good example of how trickle down never results from making rich richer. Money gets hoarded and offshored and plowed into passive, non-productive "investments".
Would you like a Warhol with that £multimillion London pied-à-terre ?

Sun, 02/16/2014 - 17:00 | Link to Comment css1971
css1971's picture

Um, you realise your conception of the movement of money is...inaccurate... to put it politely.

In actuality. The Euros never left Europe, the Roubles never left Russia and the Yuan never left China. All they did was exchange them for British Pounds (which never left the UK) in order to purchase the properties... Which means the effect was in fact on the foreign exchange market with the pound strengthening slightly and the others weakening slightly.

The pounds were then transferred to the previous owner of the property who went on to spend them as they saw fit. The Euros, Roubles and Yuan in the originating countries almost certainly went on to be spent on something else as well, incrementally increasing the level of inflation within those countries.

The perceived value of the property in London, is a point in time market price. Come back tomorrow and the perceived price will have changed, possibly to the down side.

Sun, 02/16/2014 - 18:58 | Link to Comment I Write Code
I Write Code's picture

Yahbut it's a good thing, isn't it?

There's no trickle-down, but also no inflation (and also no real consumption).  The money vanishes from the real economy, it is converted to quatloos and passed around amongst aliens.

Y'know what's funny, China builds entire ghost cities at home, then what do they put their money into outside?  More ghost real estate!  Big friggin' demand worldwide for ghost real estate - constructing fancy digs and nobody lives there.

It probably does trickle-down somewhat into the surrounding real estate markets, it sure seems to be the case here in Los Angeles.  If anything too much of it *does* trickle down.

Sun, 02/16/2014 - 18:16 | Link to Comment pupdog1
pupdog1's picture

Hideous weather, horrible boil-until-grey food, very high crime that you can't defend yourself against, massively overpriced, crooked government, and a police state that even Orwell wouldn't recognize.

What's not to like?

Sun, 02/16/2014 - 19:17 | Link to Comment brucyy
brucyy's picture

You guys never went to Paris. I think there is no french left.

Sun, 02/16/2014 - 19:45 | Link to Comment Rising Sun
Rising Sun's picture

When is the Eurabia constitution being drafted?

 

When is London changing name to Allahdon?

Sun, 02/16/2014 - 21:00 | Link to Comment rustymason
rustymason's picture

The Tribe continues its destruction of the West. When they chanted, "Ho, Ho, Western Civ Must Go!" in the 1960's, they meant it. 

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