BANGKOK: Wealthy Thai investors are shifting from buying to renting property in London as economic uncertainty, higher ownership costs and the continuing effects of Brexit make long-term commitments less attractive.
Investment budgets are also shrinking, while some capital is being redirected towards Tokyo and Niseko, where the weaker yen, lower market volatility and strong infrastructure are seen as supporting property investment.
London has long been a preferred destination for wealthy Thai families seeking homes for children studying in Britain and assets to hold over the long term.
That approach is now changing as Britain faces continued economic pressure from Brexit, political uncertainty and rising property ownership costs. Rather than abandoning London entirely, Thai investors are seeking greater flexibility.
Some families are renting homes from year to year, while directing part of their investment portfolios towards Japan, where the weaker yen has increased their purchasing power.
Prapaporn Boonkajornkul, deputy managing director of Savills Thailand, said owning a condominium or house in London had been considered part of long-term family planning among wealthy Thais five to 10 years ago.
Many families bought property while their children were still at secondary school in preparation for further education in Britain.
London property was also regarded as a long-term investment in one of the world’s leading financial centres, where asset values had continued to rise.
Thai investors were previously among London’s significant groups of foreign buyers from Asia.
The picture has since changed, not because Thai investors have lost confidence in London, but because the cost of ownership has risen.
Uncertainty in the global economy has also made holding cash and preserving liquidity more important than rushing to acquire expensive assets.
“Thai investor behaviour in London’s property market has changed noticeably,” Boonkajornkul said.
“Most clients previously chose to buy and hold property over the long term, but the Covid-19 lockdowns, the continuing effects of Brexit and uncertainty over British government policy have made long-term investment decisions more difficult.”
Thai families are still sending children to study in Britain, but many now choose annual rental agreements rather than purchasing homes as they did in the past.
They are waiting for greater clarity over Britain’s economy and government policy before committing to ownership.
The shift from owner to tenant reflects the growing value placed on flexibility at a time when uncertainty itself has become an investment cost.
Boonkajornkul identified falling investment budgets as another clear sign of changing demand.
Wealthy Thai clients previously allocated about £1.5mil to £5mil to London property, equivalent to approximately 67.35 million baht to 224.49 million baht at an exchange rate of about 44.90 baht to the pound.
Most current budgets have fallen to between £800,000 and £1.5mil, or approximately 35.2 million baht to 67.35 million baht.
Demand for homes priced at about £500,000, or roughly 22 million baht, has also risen significantly.
However, land and property prices in central London remain high, forcing investors with smaller budgets to look beyond the city centre.
Prime central London remains a high-priced luxury market.
As purchasing power weakens, Thai investors are increasingly considering properties in Zones 2 and 3, particularly developments along the Elizabeth line. — The Nation/ANN
