It is not surprising that most high-net-worth individuals have multiple homes in multiple countries. Most of these homes located in London, New York, Beverly Hills, Hong Kong, and Paris are bought primarily as investment avenues.
But if deputy leader of the Liberal Democrats Simon Hughes has his way, then rich foreigners will no longer be allowed to buy a second home in central London. According to Christie’s International Real Estate, London is considered the most exclusive and value market for overseas real estate investment, with some properties trading in excess of $10,000 per square foot.
“We must stop the scandal of people and companies buying homes in central London for investment purposes with no intention of living there. We should not allow Londoners to be priced out of their homes. If we want London to continue to be a thriving, active, diverse and cosmopolitan city, we need people to live in it,” the MP for Bermondsey and Old Southwark told the London Evening Standard.
Meanwhile, independent think tank Smith Institute’s assessment of the private housing market in London and the impact of growing overseas investment show that over 60 percent of new homes in central London are bought by overseas investors. And a high proportion of these homes are left empty.
The report predicts that overseas investment is set to continue, especially in areas such as Kensington and Chelsea, thereby increasing prices and reducing the availability of homes.
“Those who work in London or who have other ties to the capital are increasingly finding that they cannot afford to live there, either by purchasing a home or entering the rental market. Though the London housing market remains buoyant compared to the rest of the country, it is clearly not serving the interests of the majority of Londoners. Many areas of inner London have become prohibitively expensive for local residents and too many luxury flats remain empty and treated as lucrative investments,” Ben Harrison, Director, Future of London, and Paul Hackett, Director, The Smith Institute, wrote in the report.
