London house builders target cash-rich Indians
As Britain's housing market continues its downward spiral due to recession, London's biggest builders are targeting cash-rich investors from India and other emerging economies to stay afloat. A pad in London is avidly sought by upwardly mobile Indian and other foreign entrepreneurs who see the metropolis as a safe and attractive destination. Property dealers in London have reported sales to several foreign investors, including Indians. A weak pound sterling has added to the attraction of buying houses in Britain. Housing industry sources say foreign buyers bought more than half of the London homes that sold for more than £2 million each last year. The snapping up of houses in London by cash-rich foreign investors has sparked some concern that prices will remain artificially inflated, which will make it difficult for local British buyers to enter the market. London is said to be particularly attractive to the global super-rich because of its accessibility, stability, safety and the global standing of its financial institutions. It is seen as a magnet to the world's billionaires. Berkeley Group, London's largest volume house-builder, said that of the 2,000 homes it sold last year at an average price of £263,000 more than 30 per cent were to buyers in China and India. This compares with a historic average of 10 per cent. Rob Perrins, chief executive of Berkeley, told The Financial Times: "The demand from sophisticated investors, who want to get money offshore and into a stable investment, or want a place for their children to live in when they come here for university, has no match in the domestic market." Another builder, Barratt Developments, is reportedly planning to sell a third of the 750 homes it will build in London this year to Asian buyers, compared with about 5 per cent in a normal market. "A lot of them have cash, or at least easy access to it, which you just don't see with the local buyer anymore," said Gary Patrick, London sales director for Barratt. London is already home to 23 billionaires, 11 of them of foreign origin, including Indian steel baron Lakshmi Mittal and mining magnate Anil Aggarwal. The rush to buy houses in London among foreign investors is also driven by the fact that London has been consistently ranked by independent studies as the best place to locate a business in Europe. One-third of the Fortune Global 500 companies have their European headquarters in London. Foreign owned companies account for one quarter of all businesses in London. London is seen as the world's best gateway to international markets, including the 450 million people in the European Union, the biggest single market in the world. Many of the international companies who locate in the capital use it as their launch point for European or global expansion.
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