Foreign buyers are changing their preferences in UK housing market as pandemic stokes recession risks

Buyers want ‘camera-ready’ units in viewing as pandemic and social distancing force sellers and buyers to transact online

A rush for completed units could persist before higher stamp duty on non-resident purchases kicks in from April 2021

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Foreign buyers are scouting for completed units, such as these apartments developed by Capco near the West Brompton Station of the London Underground. Photo: Handout

Published: 9:30am, 20 May 2020Updated: 9:43am, 20 May 2020

Overseas investors are going for completed units in tried-and-tested locations in the UK residential market, avoiding those under construction because of the threat of economic recession, some analysts said.

The trend is particularly evident in London and homebuilders are recognising the shift in the time of coronavirus pandemic by recalibrating their plans to suit the market appetite and behaviour, they added.

“The proportion of buyers looking for completed units has increased to nearly half of all enquiries currently,” said Victoria Garrett, head of residential, Asia-Pacific, Knight Frank. “During this period of uncertainty, it is a trend we can expect to continue.”

The shift underpinned a surge in new homes in England last year, where 250,552 units were delivered to owners, the first time it has surpassed the quarter-million mark since the 1970s, according to data compiled by Savills. Demand has increased amid a rush to beat higher cost of ownership from April 2021.

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Apart from economic concerns, buyers are more likely to purchase “camera-ready completed units” during the pandemic, as both buyers and sellers are forced to conduct viewing, negotiations and transactions online, Garrett said.

In London, cost is another reason. Under a plan announced in March, the UK government will collect an additional two per cent of stamp duty from non-resident buyers from April 2021. That could continue to fire up sales volume in the city as the deadline approaches, according to JLL.