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Asian investors keep London property prices sky high

The suspicion that London is an autonomous city state that just happens to be attached to the UK continues to grow. While the country’s property market stagnates, demands for a pied-a-terre in the capital continue to proliferate. Asian property buyers are keeping the market afloat, according to one upmarket estate agent.

The Knight Frank agency reported that property investors from Singapore, Hong Kong, China, Malaysia and India last year accounted for 50% of purchases of newly constructed homes in central London. This is in marked contrast to the numbers of UK citizens buying new-build properties in London, which amounted to just 27%.

It’s a clear indication of what many have been saying for years, that property investors are pricing out key workers in the capital, who can no longer compete with the prices the foreign buyers are prepared to pay. Knight Frank’s figures showed that Asian buyers spent an average of £680,000 on new properties, a daunting 14% increase on the average price paid the year before.

"The higher price is partly due to the overall buoyancy of the market," the estate agent’s Neil Batty told the Wall Street Journal, "but the products we’re selling to Asians are definitely more high-end than two or three years ago." Prominent new developments like One Tower Bridge and St George Wharf are particularly popular with Asian investors. May of them are buying for their children, with plans to study at London universities. "They have every intention to have their children study there," Batty explained. "We get asked all the time how far a flat is from one university or another.”

It’s another aspect to London as an international metropolis which is continuing to neglect the housing needs of its teachers, police, transport workers and nurses. The capital has become a city where the workers cannot afford to live, instead having to commute in from increasingly far-flung suburbs.

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