100 signatures reached
To: U.K. Government
Stop foreign investors from buying up domestic property
Restrict the purchase of domestic dwellings to U.K. Residents only.
Why is this important?
Foreign investors are buying up chunks of new housing developments across Britain, making it even harder for young people to purchase their first home, an investigation by The Times has found.
Overseas buyers are spreading beyond London, purchasing flats in the midlands, the north and the capital’s satellite towns as the fall in the value of the pound makes property cheaper.
The Times has established that more than 93 per cent of flats in one of Manchester’s biggest housing developments have been bought by foreign residents or companies registered overseas.
Only 17 of the 282 flats were bought by British residents and only two are being lived in by UK owners. The rest are empty or being rented out.
Foreign buyers are also snapping up properties in Birmingham, Leeds, Liverpool, Newcastle, Cambridge, Slough and Brighton as they look beyond London for better returns and lower taxes. Estate agents say that the surge of foreign money is pricing out young buyers.
Daniel Valentine, author of a report on the housing crisis for the Bow Group, a Conservative think tank, described the scale of overseas investment as a scandal. He said: “British people face a grim future unless the government starts to limit the scale of foreign ownership. Overseas investors are inflating prices across the entire market, meaning most people on average wages will never be able to buy a home. There is effectively an infinite supply of international money that can pour into the country. There are 63 million potential buyers in China alone.”
The development in Manchester, where prices started at £148,000 for a one-bedroom flat, has buyers from 18 countries, including Azerbaijan, Zimbabwe and Nigeria. More than 65 came from Hong Kong and Singapore, both of which restrict Britons from buying property there. More than 130 of the properties were bought by two secretive companies based in the British Virgin Islands, a tax haven. The government announced plans this week to reveal the true owners of these companies.
The situation in Manchester is mirroring what has been happening in the capital for years. In 2014 foreign investors bought three quarters of new-build properties in central London, according to the estate agent Knight Frank. That trend appears to have accelerated since. In one development in London’s Docklands examined by The Times, all but a dozen of the 56 owners had Chinese names with almost all the rest from the Middle East or Asia. Overseas investors are no longer from wealthy elites but come from the growing middle classes of expanding Asian economies. Lucien Kirk, of the estate agent Savills, said: “These middle-class buyers are more likely to need high-yield properties [that pay good rents relative to their value], which is why they are increasingly looking outside London.”
Sadiq Khan, mayor of London, has commissioned a review into foreign ownership in the capital, which is expected to demand that new homes are marketed locally for at least six months before they go on sale to foreigners.
One estate agent’s website in Hong Kong advertises more than 80 British new-builds, in areas including Basingstoke, Coventry and Slough. Most have not yet been built. The international estate agent Juwai.com estimates that Chinese investment in foreign property could quadruple within ten years.
Steve Turner, of the Home Builders Federation, said: “A lot of developments rely on foreign investors to get started, particularly [in] high-rise developments. The upfront investment gives confidence to lenders. You can’t get that [money] from British buyers because UK mortgage rules limit offers to six months and some of these projects need finance up to three years in advance.” (Article from the Times Newspaper)
How it will be delivered
Email this to UK government