First Dibs Policy for London Properties

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Property in London is in significant demand. This is hardly ground-breaking information but even though there have been many challenges in the London property market, people still want to buy property in the capital. Given the number of jobs on offer in London, it is easy to see why so many people are keen to stay here because this is where employment opportunities are. However, there is also a significant level of interest in the London property market from foreign investors. There is no denying that the level of foreign investment has shaped and influenced the London property market, but a lot of people are now questioning the true impact of foreign investment in the London property market.

Given the fact that London Mayor Sadiq Khan has proposed a ”first dibs” policy for London properties, allowing locals an opportunity to place an offer for houses before foreign investors, this is clearly a hot topic for many people. You will regularly read about London properties lying empty and this is a contentious issue for many people. After all, with a lack of supply in the London property market, it is galling to see so many homes, flats and apartments being left unused. However, as the regulations stand, there is nothing to prevent foreign investors from buying property and using it in this manner.

There have been positive factors associated with foreign investment in the UK

It shouldn’t be said that foreign investment has all been negative for the UK. Many people and firms have benefitted from the increased demand, and associated price rises, from foreign investment. Foreign investment has also gone together with corporate investment in the capital, creating further employment opportunities. There is also the fact that foreign investment helped to shore up the property market in the wake of the European Union Referendum.

When the Brexit vote was announced, a lot of prospective UK buyers held off from making a purchase, due to the uncertainty over what would happen in the UK. With the £ crashing, many building firms found that raw materials were more expensive, and there were concerns over how the property market would fare. However, while the fall in the £ was unwelcome news for many within the UK, it represented a fantastic opportunity for many people from outside the United Kingdom. Foreign investors found that their money went further and provided them with greater value for money in the UK property market, and this ensures that the market retained buoyancy and vibrancy.

Studies indicate foreign investment has impacted on average UK property prices

So, there are many different views to take on the importance of foreign investment in the UK market and a study undertaken at King’s College London sheds further light on the impact. This analysis was carried out using information provided from Land Registry. The findings suggest that the impact of foreign investment in the UK has led to UK property prices increasing by more than 20% in the past 15 years.

The study looked at average property prices from 2014 with this figure listed as £215,000 and this was compared to the figure from 1999, which was £70,000. The research found that without foreign investment taking place, the average property price for 2014 would have been £174,000; which means that foreign investment has been responsible for an additional £41,000 being placed onto the average property price in the UK.

While some parts of the UK, and even some parts of London, have welcomed more foreign investment than other areas, there is no denying that the market as a whole has been impacted by the level of foreign investment.

Matylda Nowak

CEO, Kings Accommodation

www.kingsaccomodation.co.uk

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