London Mayor Launches Study of Foreign Investment in Property

London Mayor Sadiq Kahn has launched an investigation into the impacts of foreign investment in property. This issue sits at confluence of two of the most fraught issues in UK politics, globalization and London housing prices. An article in The Guardian reports Mayor Kahn says his study should help uncover, "the scale of what’s going on, and what action we can take to support development and help Londoners find a home."

To illustrate the impact of the issue the article cites a, "50-storey block of 214 luxury apartments by the river Thames in Vauxhall was more than 60% owned by foreign buyers. In one of the starkest examples of the impact of foreign investment, it found that a quarter of the flats were held by companies in secretive offshore tax havens, and many were unoccupied."

The Guardian notes that while this issue is impacting the city right now, most don't think it will be sorting itself out anytime soon. In fact, most see foreign investment growing. "In China, experts predict the current scale of global investment in UK property could rise significantly over the next decade."

Still, many argue that the impact of foreign investment is easy to overstate. The paper spoke with Yolande Barnes, Head of Savills' world research who framed the issue this way, "Like any major world city, the issue in London centers 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."

Whatever the reason, London housing prices are going up and unlikely to stop going up anytime soon.