Since the Budget, overseas buyers have dominated the prime West London market, says a report from Craysons.
Two-thirds of properties sold by the agent since March 2012 have been bought by non-British buyers compared with just one-third a year earlier.
The motivations behind non-nationals purchasing a home in London include investment, buying for offspring, hedging against the instability of their own property markets, and taking advantage of currency variations, says the report.
Currency is a big factor: prices in prime London have increased by 30% over the past five years for domestic buyers using Sterling. However, in Euros, prices have only increased by 16%, and by just 4% for those purchasing with US Dollars.
Prices per square foot in the Notting Hill area (Westbourne Grove, Bayswater and Ladbroke Grove ) rose by between 13.8% and 14.8% respectively year on year.
Notting Hill flats also saw significant growth in per square foot values, with average prices now exceeding £1,000 per square foot, a 14% increase year on year.
This was ahead of the 7.5% increase in prime London in 2012.
However, over the course of 2012, transaction levels dropped by 7.8% compared with 2011. This dip in transactions was particularly evident in the final quarter when there was much uncertainty over a proposed ‘Mansion Tax’ and changes to the cost of holding property offshore.