Thousands of London’s homes suitable for first-time buyers are being snapped up by foreign investors
According to a new research carried out for Mayor of London Sadiq Khan, overseas buy-to-let investors bought 3,600 of the 28,000 newly build homes in the capital between 2014 and 2016, priced between £200,000 and £500,000.
The most popular areas for purchases were the City of Westminster (11%), the Tower Hamlets (9.6%) and the Greenwich (9%).
The research showed that a substantial percentage of all of the purchases comes from overseas investors from South East Asia.
According to the data 61% of all of the purchases were from people in just four countries; Hong Kong (28%), Singapore (20.1%), Malaysia (7.5%), and China (5.4%).
According to the research by the University of York and the London School of Economics, more than 70% of the homes bought by foreigners were as rental investments and in 15% of cases the properties were bought by companies, one in six of which were in the offshore tax havens of the British Virgin Islands, Channel Islands, Isle of Man and the Cayman Islands.
The storm of overseas investors who buy London properties to let, in a city that is already failing to build enough homes to keep up with its rising population, affects those trying to get on to the property ladder as they will face even more competition for the properties they want to buy.
The findings triggered calls for the mayor and London boroughs to block foreign buyers until Londoners have had an opportunity to buy. The HomeOwners Alliance, which represents current and would-be homeowners, said the trend was “alarming” and “unfair” to first-time buyers.
Khan stressed that he was determined to help Londoners who wanted to buy their first home and the supply of new affordable homes remained his “top priority”.