While real estate market back in India is witnessing a slump, wealthy Indians are buying more properties in London than before. According to a report— London Super-Prime Sales Market Insight-Winter 2019—by Knight Frank, a real estate consultancy firm, “there was an 11% year-on-year increase in the number of Indian homebuyers in prime London markets in the 12 months to June 2019." Within London—Mayfair, Belgravia, Hyde Park, Marylebone and St John’s Wood are some of the areas where most Indians are buying properties, indicated the report.
While there are various reasons why Indian home buyers are considering London to buy properties, however recent drop in London property prices attracted more buyers. According to report, “an effective discount of about 20%, taking into account the currency and price movements in prime central London in the period between the European Union referendum and October 2019, has benefitted Indian buyers."
Report also indicates that, the profile of wealthy Indian buyers is becoming younger. “The average age of super-prime buyers in London is falling, with some 73% of super-prime buyers below 50 in the year to September 2019, which was up from less than half at the start of 2015," stated the report.
There are many people who buy real estate abroad for investment. “When compared to investments in Indian markets, the yields for both capital and rental are higher. As the domestic economy hits a slow block, we can expect Indians to continue the momentum of investments in a mature market such as London that offers higher returns and relatively shorter hold period," said Shishir Baijal, chairman and managing director, Knight Frank India.
How much can you invest abroad?
Resident individuals are allowed to remit an aggregate sum of $250,000 per financial year (April to March) under the Liberalised Remittance Scheme (LRS) of RBI. However, with remittance limit applicable individually, buying properties jointly with family member widens the net of options available to Indian investors.