Mideast buyers seen key to London property boom

Prime London property prices have risen by nearly 10 percent over the past year, driven by an influx of overseas buyers, with Middle East purchasers playing a key part, Knight Frank said in a new report.Its Prime Central London Index for July showed prices in the English capital city were now 35 percent higher than the post-credit crunch trough in March 2009.Noel Flint, head of London residential at Knight Frank, said: Middle eastern buyers have, as always, been key to the market, but with an early Ramadan their time spent in London has been shortened, however we expect to see a second window in early September as they continue their search for a London property while enjoying the cooler climate.” He added: “Once again the main reasons for the level of demand in the prime central London market can be attributed to the increase presence of overseas purchasers and low stock levels.\"In the last month our offices have seen more interest from buyers from continental Europe, possibly due to the ongoing Euro-zone crisis as well as London providing a more cosmopolitan lifestyle.\"Knight Frank\'s report showed prime London property prices rose by 0.7 percent in July, taking values to a record high while rents rose by 0.3 percent, taking the increase in the three months to July to one percent.The strongest sales markets were in Chelsea and Mayfair where values have risen by 7.7 percent and 7.2 percent respectively over the last six months.Both areas are known to be favourites for buyers from the Middle East looking for a home in England.The Belgravia lettings market is leading the way with a 1.8% rise in values over the last three months and the highest levels of demand.”Last month, property investment firm IP Global said Middle East buyers were now behind 20 percent of all prime central London real estate deals following a rapid rise in interest over the past 12 months.Defying the credit crunch, the Middle East’s rich have got richer, Merrill Lynch’s World Wealth Report 2011 said in June.The number of dollar millionaires in the region swelled by 10.4 percent in 2010, reflecting the fastest growth rate worldwide, to represent 400,000 people sitting on a cash pile of $1.7 trillion.Across the Middle East, holdings of real estate among high-net-worth players fell to 18 percent of all investments from 23 percent in 2009 as property markets saw a slump in demand. From / Arabian Business News