Demand for London residential properties among wealthy Thais rose 20% in the first half, driven by investment buyers.

Praphinleeya Phuengkhuankhan, head of residential sales – ad hoc at property consultant CBRE Thailand, said the investment trend began in 2022, but it peaked last year after house prices across the UK fell by 1.6% in 2022-23 because of weak local demand.

"The pound-to-baht exchange rate, which fell to 40-41 baht early last year, climbed throughout the year," she said. "Now it's at 46 baht and rising, helping to increase Thais' interest in London property investment."

Last year, UK properties sold to Thai buyers via all property consultants totalled 60 units, a historic high compared with the average of 10-20 units per year.

The key driver remained parents buying properties for their children while studying in the country.

However, the proportion of purchases for educational purposes last year dropped from the typical 90% to 80% as investment grew, rising from 10% in 2022 to 20%, compared with 2-3% in the pre-pandemic years.

Key factors included the escalating exchange rate, with some buyers expecting it to rise to 50 baht from 41-43 baht, according to CBRE.

There was also a shift from investing in Bangkok properties, with some buyers aiming to include London properties in their portfolios in addition to Bangkok, noted the consultancy.

"Some Thai buyers began investing after initially purchasing properties for their children's stay," said Ms Praphinleeya. "Some used a portion of the rent from their apartments in central London to cover the rental costs of apartments in outer London for their children."

Compared with Greater London, residential property investment in Thailand was less attractive as prices in Bangkok's central business district rose to nearly 800,000-900,000 baht per square metre, comparable to those in some areas of London.

"A budget of 25 million baht for a condo unit in Bangkok's prime locations can buy a unit in London," she said.

"Although that unit would be in outer London, the rental market there is much more attractive."

Since the UK reopened in 2021 after the lockdown, rental rates for apartments in central London have risen, gaining 8.5% last year compared with 2022.

Last year, CBRE sold 15 London apartment units worth a total of 600 million baht to Thai buyers, up from 10 units worth 400-500 million baht in 2022. Investment accounted for 10% of purchases each year.