Almost 13 per cent of London’s newly-built homes were bought by foreign buyers between 2014 and 2016, with many looking to use them as buy-to-let investments, according to research for the city’s mayor Sadiq Khan.
During those two years, 3,600 of the 28,000 newly-built homes in London were purchased by overseas buyers, often by investors looking to make big profits and hold them in offshore tax havens. Around half of those homes were priced for first-time buyers, ranging from £200,000 to £500,000.
Buyers based in Hong Kong accounted for 28 per cent of all overseas buyers, the highest figure of all countries. This was followed by Singapore (20.1 per cent), Malaysia (7.5 per cent) and China (5.4), with these four countries making up 61 per cent of all overseas buyers.
According to Lloyds Bank, the average house price for first-time buyers in London is £405,000, significantly higher than the UK average of £220,706.
City of Westminster was the most popular area, with 11 per cent of all London properties sold overseas being located here, while Tower Hamlets (9.6 per cent) and Greenwich (9 per cent) were the next most popular.
The findings have led to calls for Sadiq Khan to act on the amount of properties being sold to overseas buyers, prioritising Londoners instead.
Homes for Londoners, a housing board launched by Khan, recommended he take steps “to make more homes available for 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.”
Commenting on the research, Khan 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, the mayor highlighted 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.”