Businessmen from the Middle East, flush with cash after the surge in oil prices this year, have been splashing out more on multimillion-pound houses in and around London.
The war in Ukraine has led to oil prices rocketing. In the spring, they rose higher than they had been for 14 years. Even now, the cost of a barrel of Brent crude remains more than 25 per cent above its level in January.
The rise has further enriched wealthy businessmen — who are spending some of that money on luxury homes in the UK, long a popular store of wealth for the world’s super-rich.
“We’ve definitely seen more Middle Eastern buyers,” Mark Ridley, the chief executive of Savills, the property agent, said, adding that the oil price had given these purchasers “opportunities to diversify their holdings”.
Britain’s prime residential market remained robust, Ridley said, but “price growth has begun to moderate in response to the rising cost of debt”.
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Savills’ agents sold fewer homes in the first half of the year, having enjoyed a record performance in the “abnormally positive market conditions” last year.
That, coupled with the expected return of travel and entertainment expenses as agents started to wine and dine clients again, contributed to Savills reporting a 10 per cent decline in first-half underlying profits to £59.2 million from £66.1 million in the first half of last year.
Residential sales make up 11 per cent at Savills’ business. Its agents also broker sales of warehouses, find tenants for offices and look after blocks of flats. Half its revenues come from investment management, property management and consultancy.
Ridley, 60, still expects “at this stage” that Savills will meet its full-year forecasts, though he cautioned that war in Ukraine and rising interest rates were dampening investors’ sentiment.
The uncertain outlook prompted a drop of 97p, or 8.6 per cent, in the price of Savills’ shares to £10.27, marking the stock’s biggest one-day fall since the day after the Brexit vote in June 2016.