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Sadiq Khan to investigate London’s foreign property ownership issue.

October 1, 2016
sadiq-khan

Sadiq Khan claimed he will carry out the most thorough research into foreign property ownership ever undertaken amid widespread concern over London’s rising housing costs.

London mayor Sadiq Khan will begin the most comprehensive investigation into the impact of foreign investment flooding London’s housing market, after growing fears about rising housing costs and gentrification.

Khan, in an exclusive interview with the Guardian, said there are “real concerns” over the rising number of houses being bought by foreign investors.

He added: “It’s clear we need to better understand the different roles that overseas money plays in London’s housing market, the scale of what’s going on, and what action we can take to support development and help Londoners find a home. That’s why we are commissioning the most thorough research on this matter ever undertaken in Britain – the biggest look of its kind at this issue – so we can figure out exactly what can be done.”

Earlier in the year, the Guardian discovered that a 50-storey block of 214 luxury apartments near the river Thames was more than 60% owned by foreign buyers. More shocking was the fact that over 25% of the flats were held by companies in secretive offshore tax havens.

The problem is expected to get worse in the near future as analysts predict that a new wave of wealthy middle-class Chinese investors are about to quadruple the amount of money flowing annually into foreign real estate to £150bn.

Critics argue that the influx of foreign investors is causing spiraling housing costs and forcing British citizens to move out of the capital.

Khan’s investigation will examine how foreign money has changed the housing market and explore how other countries are tackling similar issues.

Khan said: “We welcome investment from around the world in building new homes, including those for first-time buyers. At the same time, as more and more Londoners struggle to get on the property ladder, there are real concerns about the prospect of a surge in the number of homes being bought by overseas investors.”

He stressed: “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, and ministers must now make all property ownership in London transparent so we can see exactly who owns what.”

“Foreign buyers are often the focus in discussions about the housing crisis, but really they are only one element in an incredibly complicated picture. Without them investing in properties at the top end, we would not have been able to fund very much social or affordable housing since the financial crash.”

But, the director of Savills’ research department argued that the real issue is a lack of available land in the capital, not foreign investors.

He said: “Like any major world city, the issue in London centres around the fact that there is not enough of the most popular bits of the city to go around. Inner London land rarely comes on to the market, and it only makes sense for people to release land and turn it into residential units if they are going to get a suitable return – which normally means high-end luxury developments.”

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