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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