Half of new homebuyers in London market are foreigners

Half of London's new homebuyers come from abroad with the city's reputation as a safe haven attracting rising investment and sustaining development.

Foreigners spent more than £3 billion (HK$35.7 billion) on new homes in Britain's capital last year, a 25 per cent increase from 2011, broker Jones Lang LaSalle said.

London has cemented its status as a haven for foreign wealth, with home buying stoking property prices and masking market weakness elsewhere, former Bank of England policymaker Sushil Wadhwani said last month.

The pound's decline has helped attract investors from Malaysia to Russia to such developments as Battersea Power Station where about half of the project's apartments have been sold in overseas markets.

"The London development market would be more challenging without demand from international investors," Adam Challis, head of residential research at Jones Lang said.

"Since development funding from banks declined due to the market downturn, international purchasers have provided a vital lifeline to maintain supply," it said.