The percentage of overseas buyers in the London property market had dropped, a new study has revealed.
According to estate agent Marsh & Parsons, overseas buyers now account for 21% of all London sales, down from 25% a year ago.
The report said overseas investors were leaving the market due to a number of factors, including higher stamp duty, a stronger pound and stricter government measures on non-dom status.
New rules for stamp duty were introduced at the end of last year, so people who buy homes worth more than £937,000 now pay more in tax.
There has been a huge wave of foreign investment into the London property market over recent years from countries such as China and Russia, which has forced prices up in the capital.
The same pattern has been mirrored in prime central London locations with overseas buyers now accounting for 32% of sales, down from 37% for the same period last year.
The report said that with overseas buyers looking elsewhere, the shortfall was being stemmed by domestic buyers.
Sales activity amongst domestic buyers has surged ahead and there are currently 14 buyers for every available property for sale in London, up from 10 at the end of 2014.
Peter Rollings, chief executive of Marsh & Parsons, said “The London property market has had to grit its teeth and bear the brunt of some rather trying taxation changes in recent months. At the high-end buyers are at the rock face of the new steeper stamp duty, and from overseas the strength of sterling, and government encroachments on nom-dom status make investing in the London property market seem daunting.
“This has cast some shadows over the capital, but the millions of Londoners who live and work in the city have acclimatised much more quickly to the property taxation changes, and have risen up to fill the void left by overseas purchasers and investors. We’re noticing longer purchase chains than ever as domestic buyers really start to dominate the market, and demand is really putting a strain on supply. This should ensure that London houses prices and sales activity continue their ascent into 2016.”
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