June 21, 2014 UK Housing Market
Civitas is a free-market organization that has recently reprimanded the government for allowing wealthy investors from overseas to create a property bubble in the UK. The bubble has resulted in unprecedented price hikes in the property market rendering millions of citizens for genuine housing needs unable to enter it.
There are also calls for imposing restrictions on wealthy foreign investors who do not live within the EU from buying homes in Britain. They should also be discouraged from getting hold of new houses as investments.
Foreign buyers are affecting the UK housing market in a very adverse way since they are using the property as investments. From the outset, foreign buyers seem like a God given opportunity to get a fast house sale in London and sell your house fast for a hefty sum. It is a fact that property owners increasingly admire until they go out shopping for another house for themselves. The impact of extra cash in the UK is inflammatory.
The trend is toxic for low earners since they have no choice but to pay sky high rents for houses in London. Buying a property is simply out of the question for these people.
A recent report has shown statistics that more than 80% of the best properties in London were sold to overseas buyers in 2012. Out of an amount of around seven billion pounds spent on buying prime London property last year, only around one and a half billion were spent by British citizens. The majority of the houses bought by foreigners were purchased as investments and not for living purpose.
Investments coming from overseas are also affecting the priorities of the developers since they are more interested in building high value homes while paying no attention to the genuine housing needs of middle and low income groups.
Although visibly preferring high value properties, foreign investors are also buying newly-built less valuable homes. More than half of the houses built during the past two years were sold to Russians, Chinese, Malaysian and Singaporeans. British citizens only bought around 25% percent of these houses.