London Property

London Property News Bulletin - 25th April 2023

Regulatory Challenges, Foreign Investments, Rising Rent, Private Estate – 25th Apr Property Bulletin

Blog Post No. 156

Regulatory Challenges, Foreign Investments, Rising Rent, Private Estate – 25th Apr Property Bulletin


New laws designed to crack down on money laundering and improve transparency in the UK property market have been implemented starting in June of 2022, but the government is struggling to enforce them. Offshore companies that own property in the UK were required to register on Companies House by 31st January 2023 or face fines of up to £2500 per day for non-compliance. However, according to The Times, only 27,547 of the estimated 32,000 affected companies had registered by 7th April 2023, leaving thousands of UK properties still owned anonymously.

This failure to enforce the law has drawn criticism from anti-corruption campaigners, including Dame Margaret Hodge, Labour chairwoman of the all-party parliamentary group on anti-corruption. The UK government’s efforts to combat money laundering and illicit financial activities will likely be hindered until they are able to ensure that all affected offshore companies comply with the new regulations.

As travel returns to normalcy, the London property market is seeing a surge in foreign investors. This comes as welcome news for the local market, which has recently experienced a cooling trend. Reports indicate that some areas have experienced an increase of close to 19% in foreign ownership.

In prime central London, Westminster boasts the highest number of overseas-owned homes, with 16,667 properties owned by foreigners. According to Benham & Reeves, a prime central London agency many foreign buyers are choosing to rent before purchasing a property, in order to gain a better understanding of the different neighbourhoods and find the one that best suits their needs.

This influx of foreign investment is expected to bring new life to the London property market and potentially drive up demand and prices in certain areas.

Rents in London are experiencing their quickest increase in over a decade. This is compounded by several landlords being priced out of the market due to taxes, as well as multiple interest rate hikes. Demand for rental properties in central areas is far exceeding supply, with an average of 10 potential tenants for each property. The significant surge in demand is also attributed to the younger generation’s struggle to purchase property and their inclination towards renting. Private renters are facing pressure from all sides, with double-digit inflation; even if house prices were to decrease, they would still struggle to purchase a home. JLL reports that tenants are increasingly choosing to renew their leases rather than move, resulting in a decline in the number of new lets in 2022. The number of new lets in the year leading up to March 2023 has decreased by 36% annually and is 44% lower than the five-year average from 2018 to 2022 for the first quarter.

St George’s Hill, a 964-acre private estate, was the brainchild of Walter George Tarrant in 1911, and together with the Wentworth estate, they remain the most prominent private estates in the country after more than a century. Both estates are centered around a golf course and provide a secure place for wealthy international residents to live and socialize. The land itself holds more value than the physical structures built on it. These are the only private estates for which the government has issued a white paper detailing planning terms, allowing potential buyers to know precisely what they can and cannot construct. As part of the covenant, a minimum of one acre of land must be purchased, and only 20% of it can be built on, preserving the natural beauty and serenity of the area. This also ensures that no high-rise buildings can be erected. Following the pandemic, these estates have become primary residences instead of empty ghost towns

Amancio Ortega the owner of Zara bought a commercial building near regents park for 82m adding to his portfolio of prime property which includes the post building. Despite Brexit Ortega is confident in London and it’s property market. Amancio Ortega, has invested heavily in the UK real estate market over the years. Through his real estate investment company, Ponte Gadea, Ortega has acquired a number of high-profile properties in London and other parts of the UK.

Some of Ponte Gadea’s notable acquisitions include a 160,000 square foot office building on Oxford Street in London, which it purchased for £230 million in 2013. The company also bought a 10-story office building in the financial district of London for £215 million in 2017.

In addition to these commercial properties, Ponte Gadea has also invested in residential real estate in the UK. In 2018, the company bought a portfolio of 135 apartments in the trendy area of Shoreditch in London for £52 million.

Ortega’s investment in the UK real estate market reflects his long-standing interest in investing in prime properties around the world. Through Ponte Gadea, he has amassed a vast portfolio of properties in Europe, the Americas, and Asia, making him one of the world’s wealthiest property owners.

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