Rich Americans Are Finding Bargains In London

You can see Buckingham Palace from the huge sash windows, and the Queen Anne period features resemble something of its neighbor’s. But it is not British buyers that Wahid Miah is showing around this London property, on the market for £33 million, ($41 million), but American buyers.

“In the last quarter we’ve noticed a 15% increase in U.S. buyers”, says Miah, whose real estate firm, The Cloister, markets some of the capital’s more expensive properties.

The number of “prime” London homes that are being snapped up by American buyers has almost doubled in 2019 according to research from Knight Frank, a real estate consultancy. U.S. buyers now make up a fifth of international demand in prime central London property. This is up on previous years when they made up a seventh.

When Americans come house shopping in central London today, they spend an average of £7.3 million ($9.2 million), also up from the average of £5 million ($6.3 million) over the past decade.

The average has been raised by landmark deals, such as Ken Griffin’s purchase a £95 million ($122 million) house in January.

Griffin’s new home is also a stone’s throw away from Buckingham Palace. Miah hopes that having an American billionaire living next door will tempt others into this neighborhood. However, it is Marylebone and Mayfair that are the two most popular areas for U.S. buyers says Knight Frank. Both are affluent locations with historic properties. 

Around 30% of the units in one historic development have already gone to American buyers. Chris Richmond, head of sales at CIT, which is marketing the Grade 1 listed ‘Regent’s Crescent’ building says history is a big draw: “Buyers are attracted to the building’s traditional Regency grandeur”.

However, it is less the appeal of palatial properties than the pound that is attracting American buyers. The fall of the pound against the U.S. dollar, as well as a reduction in London’s most expensive properties, means American buyers can pick up houses around 50% less than four years ago.

A survey on Wednesday showed that London is now cheaper for expatriates to live in than previously, largely as a result of currency fluctuations.

Another factor driving American purchases is the strength of the U.K.’s economy in spite of Brexit, says Liam Bailey, global head of research at Knight Frank: “Not only has Brexit failed to have any impact, but over this period London has taken the dominant share of U.S. corporate investment in Europe – leading to a significant uptick in demand for prime property from relocating U.S. employees, entrepreneurs and business owners – especially from the tech sector.”

Miah agrees that Brexit is losing its dampening effect: “Currency is one factor plus I think people are tired of us coming out of Europe”.

Many Americans are already taking advantages. U.S. investors made up the third largest recipients of the U.K.’s Tier 1 Investor Visa by nationality last year. The Visa allows residency in return for a £2 million ($2.5 million) investment in the U.K. economy and passing the relevant compliance checks.

However, U.S. buyers are outdone by Chinese in both metrics. Americans are currently second to Chinese in prime London home purchases, says Knight Frank, and they fall behind both Chinese and Russians when it comes to Tier 1 Visa applications.

This is good news for real estate agents like Miah as the increased international demand creates more competition. Expect more multimillion pound homes to change hands in London, he says. “We’re more optimistic now”. 

This post first appeared on Forbes.com. To see the original, click here.