Reuters reports that shrinking bonus pools in London's City financial district will reduce bankers' clout in the British capital's buoyant prime housing market this year, with hedge fund managers set to outspend them for the first time, data from Savills showed.
The property consultancy said on Wednesday that while banker bonuses were a key factor behind rocketing London house prices in 2006-7, their importance has been overtaken by overseas investors and buyers from the hedge fund and private office-populated West End district.
"Until that point, there had been a strong link between house price movements in the capital and bonus payments, but that link is now broken and the market's dependency on City bonuses is much reduced," Savills said on Wednesday.
Buyers from the West End financial district are expected to spend 1.5 billion pounds on London houses priced over 500,000 pounds this year, while City bankers are predicted to spend just over 1 billion pounds in bonus money.
Savills said it expects international investors to retain their position as London's biggest buyers of prime housing in 2012 with a predicted spend of 4 billion pounds, as many continue to favour London for its safe haven status.
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