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27 February 2008

Foreign investors looking to UK property

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by Kay Mitchell

Foreign investors looking to UK property

Research from estate agent, Knight Frank, has established that foreign investors are helping to boost the UK housing market as it starts to cool.

The agent revealed that 37% of property buyers in the £1 million to £2 million price bracket are foreign investors with many from Europe, Russia and the Middle East.

The interest from high net worth individuals (HNWIs) was particularly concentrated in the capital and south-east. However, these overseas investors are hunting properties ranging from £175,000 to £5 million.

Liam Bailey of Knight Frank said over the last few years, the increase in global wealth has been mirrored by a growth in the desire of HNWIs to acquire property as a means of expanding their investment portfolios.

The UK has a long established position for attracting investment of this type with HNWIs drawn to its robust, free market economy, stable political environment and, crucially, advantageous tax regime, added Mr Bailey.

Mr Bailey continued the most active investors in UK property include HNWIs from Russia who, for tax purposes last year bought property either via a corporate entity, or in a child’s name from an offshore account.

It is expected that this level of interest will continue throughout 2008 in light of the significant growth in individual wealth in Russia and the country’s open policy on monetary exchange, said Mr Bailey.

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