The market for prime property in London is no longer the playground for those looking to take up permanent residence in the capital, according to a new report into this specific arm of the sector. It said that second-home buyers, and in particular landlords, are snapping up prime properties at a faster rate than ever before.
At the moment, as many as 59 per cent of homes in the prime sector are being bought by those who own properties and live elsewhere, with the majority of this being made up by buy-to-let investors looking to move into a new area of the private rented sector.
In the three month period between January and March of this year, the London Property Monitor report from estate agent Marsh & Parsons said, the prime market saw 36 per cent of all sales made to those who intend to find tenants to live in their properties. This means that they were the single most prominent group of buyers in the prime property sector for the first quarter of 2016.
During the previous quarter, buy-to-let investors had made up just 26 per cent of investment purchases in this area of the market, showing just how their influence has grown in the past three months across London alone.
"Investors will always be the stalwarts of the prime London property market as it’s the golden goose of capital returns. But second home owners were much more prominent in the market than we would typically expect," said David Brown, chief executive officer of Marsh & Parsons.
However, he was quick to point out that this was by no means a typical quarter in the market, with many investors buying quickly in order to beat the Stamp Duty levy and avoid the additional costs of investing in rental homes after April.
"Naturally, the knee jerk reaction among these groups has been to hurry through property purchases before the deadline, and make savings while they can. Now that the ruckus has passed, we’ll see much more orderly transactions over the summer months, as the market rebalances towards first time buyers and other owner occupiers for whom it will just be business as usual," Mr Brown added.
Overall, demand has seen a real rise in the prime market in the last year, which has meant stronger competition between buyers, and prices being pushed upwards.
The report states that in the past 12 months, the number of people going head to head to buy every home that becomes available in the prime London market has jumped by as much as nine per cent, with 14 buyers now registered for every home on the market.