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City fatcats set to splash property cash

Property experts are confident that Christmas bonuses will still be spent on property, despite the gloomier outlook in the financial and property markets...

However, it will be the overseas markets and the more prestigious locations in the UK which will benefit the most, reveal experts exhibiting at The Homebuyer Show (7-9 March, ExCeL, London).

Despite forecasts that London's city workers will see their Christmas bonuses fall by an average 16%, the bonus pot is still estimated to reach a total of £7.4bn, and a substantial amount of money will be spent on property. However, this year, experts believe that over 70% of the money invested in property will be channelled into overseas properties.

Decline in bonuses

Alistair Powell, CEO of Seven Continent Investment, commented: “This year, a decline in bonuses is widely anticipated and the property market has wavered slightly. However, there have already been signs that city workers will be looking to invest in property.

We have seen a 17% rise in enquiries this month, as workers focus on maximising their bonus on investment opportunities rather than 'splashing' their money around. We are expecting a significant number of the bonuses to be spent on overseas properties, with some of the more interesting global destinations on people's radars. For example, we have already seen a sharp rise in the number of enquiries in Panama and Malaysia.”

City bonuses will also be spent closer to home. Traditionally, the London market has been the main beneficiary of bonus money and this year is no different.

Bonuses 'support the London market'

Chris Carter, Sales Director of London based property portfolio specialists, Property Brief, comments: “City bonuses will again help to support the London market both in terms of buy-to-let and upgrading main homes. We expect the prestigious locations popular with these city workers, such as Chelsea and Knightsbridge to deliver the best rate of growth in the New Year.”

“However, investors shouldn't only look at the established prime locations as there is still much evidence that the buy-to-let market is buoyant and the current market offers an excellent time for investors to secure themselves some competitive deals at auctions and from developers.”