This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/society/2017/jun/13/foreign-investors-snapping-up-london-homes-suitable-for-first-time-buyers
The article has changed 6 times. There is an RSS feed of changes available.
| Version 3 | Version 4 |
|---|---|
| Foreign investors snapping up London homes suitable for first-time buyers | Foreign investors snapping up London homes suitable for first-time buyers |
| (7 months later) | |
| Research for London mayor, Sadiq Khan, shows homes being used as buy-to-let investments and being held in off-shore tax havens | |
| Robert Booth | |
| Tue 13 Jun 2017 16.10 BST | |
| Last modified on Mon 27 Nov 2017 22.47 GMT | |
| Share on Facebook | |
| Share on Twitter | |
| Share via Email | |
| View more sharing options | |
| Share on LinkedIn | |
| Share on Pinterest | |
| Share on Google+ | |
| Share on WhatsApp | |
| Share on Messenger | |
| Close | |
| Foreign investors are buying up thousands of homes suitable for first-time buyers in London, using them as buy-to-let investments and often holding them in offshore tax havens, research for the London mayor, Sadiq Khan, has revealed. | Foreign investors are buying up thousands of homes suitable for first-time buyers in London, using them as buy-to-let investments and often holding them in offshore tax havens, research for the London mayor, Sadiq Khan, has revealed. |
| Led by investors from Hong Kong and Singapore, foreign buyers snapped up 3,600 of London’s 28,000 newly built homes between 2014 and 2016, according to the most comprehensive survey yet of international investment in London housing. About half of those were priced for first-time buyers between £200,000 and £500,000. | Led by investors from Hong Kong and Singapore, foreign buyers snapped up 3,600 of London’s 28,000 newly built homes between 2014 and 2016, according to the most comprehensive survey yet of international investment in London housing. About half of those were priced for first-time buyers between £200,000 and £500,000. |
| The average cost of a home in the capital bought by a first-time buyer is now £405,000, according to Lloyds bank, almost double the national average. A third of new homes in the prime central London boroughs of Westminster, Kensington and Chelsea and the City were also sold abroad. | The average cost of a home in the capital bought by a first-time buyer is now £405,000, according to Lloyds bank, almost double the national average. A third of new homes in the prime central London boroughs of Westminster, Kensington and Chelsea and the City were also sold abroad. |
| 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. | 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. |
| In Tower Hamlets, Greenwich and Wandsworth, where the highest number of homes are under development, one in eight of all new homes were bought by foreign buyers. | In Tower Hamlets, Greenwich and Wandsworth, where the highest number of homes are under development, one in eight of all new homes were bought by foreign buyers. |
| 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, 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, according to the research by the University of York and the London School of Economics. |
| Khan is facing pressure to act from his own housing board, Homes for Londoners, which recommended on Tuesday he should take steps “to make more homes available to Londoners before anyone else, with any measures particularly focusing on homes sold for prices that Londoners, especially first-time buyers, are more likely to be able to afford”. | Khan is facing pressure to act from his own housing board, Homes for Londoners, which recommended on Tuesday he should take steps “to make more homes available to Londoners before anyone else, with any measures particularly focusing on homes sold for prices that Londoners, especially first-time buyers, are more likely to be able to afford”. |
| Khan said he was determined to help Londoners who wanted to buy their first home and the supply of new affordable homes remained his “top priority”. | Khan said he was determined to help Londoners who wanted to buy their first home and the supply of new affordable homes remained his “top priority”. |
| He said: “In this context, it is a significant finding that more than half of the homes bought by foreign owners were below £500,000 – a price range that will include homes for some first-time buyers.” | He said: “In this context, it is a significant finding that more than half of the homes bought by foreign owners were below £500,000 – a price range that will include homes for some first-time buyers.” |
| However, he also stressed that “international investment plays a vital role in providing developers with the certainty and finance they need to increase the supply of homes and infrastructure for Londoners”. | However, he also stressed that “international investment plays a vital role in providing developers with the certainty and finance they need to increase the supply of homes and infrastructure for Londoners”. |
| City Hall said the mayor would “respond with measures he intends to put in place in due course”. | City Hall said the mayor would “respond with measures he intends to put in place in due course”. |
| Labour’s shadow housing secretary, John Healey, said a Labour government would give local people “first dibs” on new homes ahead of overseas buyers. “This failure on housing was one of the reasons why the Conservatives fell short at the election last week,” he said. | Labour’s shadow housing secretary, John Healey, said a Labour government would give local people “first dibs” on new homes ahead of overseas buyers. “This failure on housing was one of the reasons why the Conservatives fell short at the election last week,” he said. |
| Paul Higgins, the chief executive of the Home Owners Alliance, said: “This is an alarming trend. It is not just a London thing, it is also happening in Manchester. We are now building the right type of homes, but they are being snapped up because London is seen as a place for investment.” | Paul Higgins, the chief executive of the Home Owners Alliance, said: “This is an alarming trend. It is not just a London thing, it is also happening in Manchester. We are now building the right type of homes, but they are being snapped up because London is seen as a place for investment.” |
| The research was based on an analysis of sample of 8,000 Land Registry records and found that almost all of London’s largest residential development needed overseas investment to get under way, either through purchasers buying off-plan or through equity finance or investment in UK housebuilding companies. | The research was based on an analysis of sample of 8,000 Land Registry records and found that almost all of London’s largest residential development needed overseas investment to get under way, either through purchasers buying off-plan or through equity finance or investment in UK housebuilding companies. |
| Wealthy foreign buyers have for years been attracted to London homes as a stable investment and a safe-haven for their money, particularly when they live in politically unstable countries. The government has raised concerns that some buyers are housing the proceeds of corruption in London homes and when Boris Johnson was mayor he attacked the trend of London homes being used as “gold bullion in the sky”. | Wealthy foreign buyers have for years been attracted to London homes as a stable investment and a safe-haven for their money, particularly when they live in politically unstable countries. The government has raised concerns that some buyers are housing the proceeds of corruption in London homes and when Boris Johnson was mayor he attacked the trend of London homes being used as “gold bullion in the sky”. |
| In 2015, the brochure for a development in Vauxhall Cross boasted returns on property in the area had been “better than … the FTSE 100 and gold”. | In 2015, the brochure for a development in Vauxhall Cross boasted returns on property in the area had been “better than … the FTSE 100 and gold”. |
| Earlier this year, it emerged that one new apartment complex in Southwark, on the site of the former Heygate council estate, was 100% bought up by foreign investors. All 51 of the apartments in South Gardens in the Elephant and Castle area were sold abroad, according to Transparency International. At Baltimore Wharf, a development in the Isle of Dogs, where apartments started at £400,000, 87% of the 2,999 apartments were sold to foreign investors and 40% of those were based in high corruption risk jurisdictions, according to TI. | Earlier this year, it emerged that one new apartment complex in Southwark, on the site of the former Heygate council estate, was 100% bought up by foreign investors. All 51 of the apartments in South Gardens in the Elephant and Castle area were sold abroad, according to Transparency International. At Baltimore Wharf, a development in the Isle of Dogs, where apartments started at £400,000, 87% of the 2,999 apartments were sold to foreign investors and 40% of those were based in high corruption risk jurisdictions, according to TI. |
| Buyers from Hong Kong and Singapore accounted for almost half of all transactions by foreign buyers, followed by Malaysia and China, according to the mayor’s research. | Buyers from Hong Kong and Singapore accounted for almost half of all transactions by foreign buyers, followed by Malaysia and China, according to the mayor’s research. |
| In Westminster, which is favoured by Singaporean buyers, four out of 10 new-build properties were sold abroad over the two-year period. The ratio was one in four in Southwark, favoured most by buyers from Hong Kong, and about one in five in Hackney, Lewisham, Hammersmith and Fulham, Newham and Merton. The most popular destination for Chinese investment was Greenwich, where Chinese developer Knight Dragon is building nearly 16,000 homes. | In Westminster, which is favoured by Singaporean buyers, four out of 10 new-build properties were sold abroad over the two-year period. The ratio was one in four in Southwark, favoured most by buyers from Hong Kong, and about one in five in Hackney, Lewisham, Hammersmith and Fulham, Newham and Merton. The most popular destination for Chinese investment was Greenwich, where Chinese developer Knight Dragon is building nearly 16,000 homes. |
| The inquiry was launched after public outrage at several large-scale housing developments being bought up as foreign investments. The Guardian revealed in 2016 how more than half of the apartments in the 50-storey St George’s Wharf tower in Vauxhall, with views of the Palace of Westminster, were sold to foreign buyers with many rarely occupied. | The inquiry was launched after public outrage at several large-scale housing developments being bought up as foreign investments. The Guardian revealed in 2016 how more than half of the apartments in the 50-storey St George’s Wharf tower in Vauxhall, with views of the Palace of Westminster, were sold to foreign buyers with many rarely occupied. |
| When he launched the research project four months later, he said: “We urgently need more transparency around overseas money invested in London property. Londoners need reassuring that dirty money isn’t flooding into our property market.” | When he launched the research project four months later, he said: “We urgently need more transparency around overseas money invested in London property. Londoners need reassuring that dirty money isn’t flooding into our property market.” |
| Homes owned by foreign buyers are more likely to be under-occupied, according to the research, although there was almost no evidence of units being left entirely empty. | Homes owned by foreign buyers are more likely to be under-occupied, according to the research, although there was almost no evidence of units being left entirely empty. |
| Stewart Baseley, the executive chairman of the Home Builders Federation, which represents volume housebuilders, said: “The industry is keen to work with the mayor and build on the agreements already in place to ensure the new homes being built are available for Londoners.” | Stewart Baseley, the executive chairman of the Home Builders Federation, which represents volume housebuilders, said: “The industry is keen to work with the mayor and build on the agreements already in place to ensure the new homes being built are available for Londoners.” |
| Housing | |
| Sadiq Khan | |
| London | |
| news | |
| Share on Facebook | |
| Share on Twitter | |
| Share via Email | |
| Share on LinkedIn | |
| Share on Pinterest | |
| Share on Google+ | |
| Share on WhatsApp | |
| Share on Messenger | |
| Reuse this content |