By Rachel Mortimer.
Cash Is King: Why International Buyers Are Snapping Up Prime London Property
A cooling market and a weaker pound have combined to make prime central London unusually attractive to wealthy international buyers — many of whom are choosing to buy outright in cash rather than take on mortgage finance. According to Hamptons, half of all homes sold in prime central London in January were bought without a mortgage, up from 42% in January 2022 and 38% in January 2021.
A Currency Advantage Layered on Top of Falling Prices
Demand from international buyers — particularly those holding currencies pegged to the US dollar — accelerated sharply after the pound fell to a record low following last autumn’s mini-Budget. Although sterling has since recovered to around its pre-mini-Budget level, buyers who exchanged funds during the low point are continuing to benefit from that decision, having effectively locked in a discount unrelated to where the currency sits today.
Cash Buyers Now Make Up Half of Black Brick’s Business
We’ve seen this shift play out directly in our own client base. The proportion of Black Brick clients buying in cash has more than doubled over the past year, as rising borrowing costs pushed more buyers away from mortgage finance: roughly half of our clients now pay in cash, compared with an average of around 20% in previous years.
As Managing Partner Camilla Dell explains, this shift has given cash buyers real negotiating leverage in the current market:
“Many vendors will place significant value on securing a cash buyer for their property, particularly in a market currently riven with down-valuations and fall throughs. They may even accept a lower offer for their property if the buyer is able to pay in cash. It is a buyers’ market at the moment and being a cash buyer means that you have a better chance of getting a better price agreed.”
US Buyers Are Driving Much of This Activity
American buyer activity has grown substantially: almost a third of Black Brick’s transactions in 2022 involved US buyers, more than double the 12.5% recorded the previous year. Dell attributes this directly to the scale of the opportunity dollar-denominated buyers are currently seeing in London:
“There’s an investment case for US dollar buyers to be eyeing the market right now. Prime central London property values are down 18 per cent since the peak in 2014, combined with the currency effect, dollar buyers are now getting a 42 per cent discount compared to then, all making it very appealing.”
Our Take
The combination of softer prime London pricing and a still-favourable currency position has created a genuinely compelling window for international, and particularly US dollar-based, buyers. With cash buyers increasingly favoured by sellers navigating a slower, more cautious lending environment, we expect international cash buyers to remain one of the most active and influential groups in the prime central London market in the months ahead.
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