A relaxation of withdrawal allowanced by the Reserve Bank of India has resulted in more Indian buyers looking for property in London, it is suggested. Buying agency Black Brick has reported that 13% of deals this year have been to Indian buyers, up from 2.6% a couple of years ago and it believes this is because of the changes in banking regulation.
The changes announced by the Reserve Bank of India enables Indian families to take $250,000 of money per family member, amounting to $1 million per year for a family of four. Previously, the figure was just $100,000 per family member or $400,000 per year based on family of four. In the financial year 2013/2014 Black Brick says that 5.9% of deals were to Indian buyers and in 2014/2015 it was only 3% while in 2015/2016 the figure dropped further to 2.6% but has since risen considerably.
Indian buyers have become much more active in the prime London property market in recent years. The latest data from Cluttons released last month shows that between August 2016 and July 2017, Indian buyers now account for 22% of the total sales in central London, up from 5% in 2012.Indian property buyers are buying mainly for primary residences or to have a bolt hole in the city, a few are taking advantage of the exchange rate and buying for investment.
‘We have seen a marked increase in Indian buyers using our services and this is down to the amount of money that Indian’s are allowed to transmit out of India. The Reserve Bank of India sets exchange control limits with today’s amount $250,000 per family member, per year,’ said Camilla Dell, managing partner at Black Brick.
‘This is a significant improvement from a few years ago, when the amount allowed was under $100,000 per family member, per year. It means that a family of four, after one year, will have $1 million to spend, and after two years $2 million. It quickly adds up, and explains why a lot of our Indian clients are buying in the £1 million to £2 million range,’ she explained.
The latest figures from Black Brick show that from the 13% of Indian buyers so far this year, 6.5% were owner occupiers and 6.5% were managed sales, buying in Mayfair and Knightsbridge for primary and secondary homes.
Last year figures show 12% of transactions were to Indian buyers with 6% being for investment as buy to lets and 6% to owner-occupiers. The investors chose new build flats in Shoreditch and White City, whereas the owner-occupiers chose Mayfair for a primary residence and a period conversion in Regents Park as a second home.
Over 50% of Black Brick’s Indian clients follow the Vastu system, mostly older generations in their 40s and 50s, but Vastu is also important to younger buyers and many use a Vastu specialist when buying a property in London.
This limits what properties Indian buyers are interested in purchasing, as often architecture and design doesn’t comply with Vastu. As such, an increasing number are using property specialists to help with their searches.
‘Vastu can be challenging as it makes the property search tricky. If a kitchen is in the wrong position within a house it can scupper the whole deal. Investors are less worried about Vastu but if there is something specific about an apartment being unlucky, even if it’s a buy to let, that will influence their buying decision,’ Dell explained.
‘We recently had a client who bought two apartments in one development. They bought off plan so they could ask the developer to move doors to comply with Vastu. Therefore, often new build, off plan homes appeal as they can be tweaked accordingly,’ she pointed out.
Savvy buyers are choosing to use buying agents more and more, saving them both time and money. Since April this year, Black Brick has acquired just over £40 million of properties. Clients have come from around the word including 20% from the Middle East, 20% from the UK, 13% from France, Nigeria, India and Russia and 7% from Switzerland.
‘Now is the time to buy property in London. People are saving more and spending less and with the favourable exchange rate, International investors can save thousands on their purchase,’ Dell added.
https://www.propertywire.com/news/uk/bank-changes-mean-indians-buying-prime-property-london/