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Are foreign investors really buying up all of London's prime properties?


Are foreign investors really buying up all of London's prime properties?

Defining a Londoner is difficult in a world city. Blaming foreign people for pushing up prices may be attacking the wrong target
Colin Wiles
Thursday 14 November 2013 08.00 GMT

Recent weeks have seen a great deal of debate about the impact of foreign buyers on London's housing market. But what do we know so far?

Firstly, that foreign buyers bought up 75% of new homes in central London over the past year, although developers argue that many of these would not have been built without the up-front cash from overseas. But according to property experts Knight Frank foreigners also purchased 49% of all properties worth more than £1m in central London over the same period – that's all properties on the market, not just new ones (new homes account for 20% of all transactions.)

What impact does this have on London's housing market – and does it really mean that foreigners are forcing Londoners out of inner London, as some commentators have suggested?

housing network

I looked at all the properties for sale on Rightmove in the 10 most expensive post codes in central London (SW1, SW3, SW5, SW7, SW10, W1, W8, W11, WC2 and NW1) and found that there were 3,477 homes for sale of which 2,439 (70%) were priced at more than £1m. The percentage of £1m-plus properties ranged from 52% of properties in NW1 (Camden Town, Somers Town, Regent's Park) to 88% in SW7 (South Kensington and parts of Knightsbridge).

If foreign buyers are buying half of these prime London properties then 35% of all the properties on sale in these 10 areas are going to foreigners.

On the face of it this would suggest that foreign money must have contributed to the 9% increase in London house prices over the past year, forcing UK residents into the outlying districts of London. But Knight Frank point out that, although 49% of buyers were foreign only 28% of buyers did not live in the UK.

Is a French banker who has rented in London for 10 years and now decided to buy a foreigner or a Londoner?

This is the nub of the issue. The last census showed that only 45% of Londoners described themselves as white British. London is a vast melting pot, a world city whose population is in constant flux, as Guardian journalist Dave Hill pointed out recently. To attack foreign purchasers for inflating London's housing market may be hitting the wrong target.

By all means let's take action against those super-rich buyers who leave properties empty for much of the year, but the vast majority of foreign buyers are either living in their purchases or letting them out. Perhaps we should instead focus on the fact that London is simply not building enough homes for Londoners or foreigners to meet its present and future needs.

With London's population set to rise to 10 million by 2030, this situation will only get worse unless the mayor takes action to put in place, and implement, a decent housing strategy.


• Want your say? Email housingnetwork@theguardian.com

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