In 2011, the firm sold London new build residential property to foreign buyers valued at circa $2 billion of which regional investors accounted for about 9 percent, up from 5 percent in 2010. The Middle East now accounts for the second largest group of foreign investors into the London residential market after nationals from the Asia Pacific region that accounted for 15 percent of overall sales.

Despite the ongoing global financial crisis and continued concerns over the euro, Central London's residential market continued to recover very strongly throughout 2011. Over the past two years core locations throughout the UK capital have seen prices increase by an average of 10 percent while outer core areas have seen a growth of 6.9 percent fueled by a chronic undersupply of property in the best London addresses encouraging steady demand from both domestic and international buyers. This growth is expected to continue throughout 2012. Jones Lang LaSalle estimates that Central London prices could grow by 4 percent this year, 5 percent in 2013 and peak at 8 percent in 2014. Rents are also expected to grow by 7 percent over the next twelve months and 8 percent in 2013, providing a solid return for potential investors.

Demand is being driven by the lack of new supply, which is being increasingly exacerbated by a population, which is expected to grow by about 8.6 percent over the next decade. However, while two bedroom units are seeing the highest price growth, driven by the corresponding increase of 11.2 percent in the number of households, the majority of Middle Eastern investors are primarily looking for large family homes with 3 to 4 bedrooms, ranging in value from $3 to $24 million. Key areas of interest remain Lancaster Gate, Marble Arch, Knightsbridge, Belgravia, Mayfair, Kensington, Regent's Park and St. John's Wood. However Jones Lang LaSalle has identified a new type of Middle Eastern investor - those who are looking for value with investment opportunities in properties outside these traditional areas such as those in Marylebone and Fitzrovia.

Commenting on the report, Ben Stroud, associate director of residential agency, development and investment at Jones Lang LaSalle London, said: "Middle Eastern investors have strong historic links to the London property market and have typically invested for the longer term. We are definitely seeing increased interest both in terms of volume as well as the variety of locations that regional investors are interested in. London continues to offer solid growth potential and its twinned status as an accessible capital city and financial centre, alongside a stable political system and transparent legal framework, continues to attract interest from across the Middle East. London's reputation as a safe haven for investors is being reinforced by global troubles not undermined. Additional incentives such as a weak sterling and a favorable tax system are also making it more attractive among a range of potential foreign investors."