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Developers turning to bulk discounts to lure foreign investors

Claim is made by estate agent James Pendleton as it opens department to take advantage of overseas buyer 'feeding frenzy'.

Sheila Manchester

Independent estate agent James Pendleton has launched a bulk property buying service for foreign investors as developers in the capital begin to soften their attitudes to discounting.

Asking prices in the capital have been falling for well over a year as Londoners struggle to find homes they can afford – but demand from foreign investors buying in bulk is stronger than ever, the company claims.

Founder director Lee Pendleton says they are benefiting from currency devaluations since the EU Referendum and are also taking advantage of a softening in the attitude of developers to discounting.

He adds that a no-deal Brexit would only serve to spark a more intense ‘feeding frenzy’, as these large players ‘pile in’ to take further advantage of further weakness in the value of the pound.

The £40million sale

In the latest example of this trend, James Pendleton is currently handling the purchase of 75 units in SW London as part of a single transaction worth in excess of £40m.

Combined with a currency dividend, if these investors get a 25% discount from a developer, they can have a 40% discount on value overall.

However, Pendleton warns there is still very little demand for anything over £1,500 per sq ft — with bulk buyers favouring anything under £800 per sq ft.

“Anyone who thinks foreign investors and funds have beat a retreat from London is mistaken. Only UK buyers have backed away,” says director Lee Pendleton.

“Developers see the market has softened and they are willing to give bigger discounts, there are a lot of big overseas funds and investors looking for freehold buildings with a mix of commercial and residential.

“They hoover up dozens of homes at a time and their behaviour indicates that the bottom of the London market is at hand. The prospect of a no-deal Brexit is a concern to some but it would only spark a feeding frenzy among these large players who will pile in as the pound falls.”

Read more about overseas investors.

August 29, 2019

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