Metro - 17 October 2014
Property developers not giving UK buyers a chance
By Jo Eccles
The new build market in London has once again attracted attention as Galliard Homes, one of the UK’s biggest house builders, has admitted to offering new apartments to buyers in Hong Kong, one week ahead of UK based buyers.
Unfortunately, this practice has been rife in the new build market for a number of years now. Despite a huge construction wave of thousands of new apartments in London, the supply hasn’t met demand from UK buyers or eased prices. Instead, the majority of developers have employed slick sales teams and headed out to Asia, where they’ve marketed their developments to expats and locals.
Asia-based buyers have often been prepared to pay a premium for UK property because they’ve made savings on the favourable exchange rate, or because their earnings have been taxed at a very low rate. Other buyers are simply pleased to have somewhere to put their money and may have paid a higher price because they’re not clued up on London prices. As a consequence, they have set a benchmark, meaning that UK buyers then have to pay higher prices too. Because these buyers get the first look in, UK buyers often aren’t even aware of the development being for sale, let alone given a chance to buy there.
Amid widespread concern about the number of developments pre-sold to investors abroad, in December 2013, a number of major developers signed a pledge stating that they would give UK purchasers an equal chance to buy. However, Galliard’s recent release of properties to Hong Kong buyers first, has highlighted that this is still an issue.
Being able to purchase in advance of Asian buyers is possible, but you really need to know who to go to. We buy for our clients, but are often only able to do so because of longstanding relationships with new homes teams, and because of the volumes we buy. As an individual buyer, it can be extremely difficult. Hopefully though, we will soon start to see changes in the market and the developers will stick to their pledge.