The Government and London's Mayor should curb speculation in the property market which is experiencing unprecedented growth in overseas investment, claims a new report.
Research by Future of London, which focuses on the urban regeneration sector in the capital, highlights the negative effects of the sharp rise in overseas investment. Its report 'London for Sale? by Andrew Heywood, a visiting fellow from the Smith Institute, says London’s housing market has become "distorted and dysfunctional" as a result of the massive increase in overseas investment in expensive properties for the super-rich. Investment in luxury homes has doubled to over £5 billion a year.
The report also says that:
* more than 60% of new homes in central London are being bought by overseas investors
* the growth in overseas investment in London property is set to continue, despite the higher stamp duty rate which risks creating a “housing bubble”.
* with more buyers purchasing for invesement purposes, there is a risk prices will be pushed up and the availability of homes to buy for local people will come down
“London faces a significant housing challenge in the years ahead. If the stated aims of the Mayor to promote more homes and provide assistance to first-time buyers are to be met, then more attention must be devoted to the dynamics of the private housing market," said Ben Harrison, Director of Future of Londone. "Within this focus, the most urgent task is to understand and develop a strategy in relation to overseas investment. London practitioners must do more to boost their knowledge of the scale, distribution and sources of overseas investment into the Capital, and the impact that this has on prices, affordability and overall housing supply.”