Tales from the Front Line

It's hot, but not that hot!

by James Geddes
on July 14, 2010 in London Property

The ongoing British fascination with the weather means that one regularly hears “It's too hot” especially in London during this current warm spell. So, spare a thought for those that come here for our summer from hotter climes.

What relevance has the weather to the property market you may ask? Well the link is clear. Whilst the British, Northern European and American buyers head off for their summer holidays, their position in the central London property market is filled by other nationalities, such as those that come to London to escape the oppressive heat of their own countries.

Traditionally this influx has been made up of people from the Indian sub-continent and the Middle East, with a few Eastern Europeans too and these regions have a tendency to think in US dollars. Thanks to the Bank of England's desire to keep interest rates low and the difficulty of the Government to plug the deficit, the value of Stirling against the US dollar in particular has plummeted. It was only 24 months ago that CABLE sat at over 2 dollars to the pound but this year the rate has been as low as 1.4 dollars to the pound and we are currently at a level of 1.5 dollars to the pound. This means that despite the unexpected price rises in central London since last summer, which are now slowing, these US dollar based buyers are still in a stronger position than they have been for some time.

Here at Property Vision, thanks to our link with HSBC Private Bank, we have found that when one side is down another is up. Because of this international spread of clients we are still busy and have clients that wish to purchase property in central London. The real problem is a lack of quality supply but then that is another story.

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