Affordable housing sold to overseas investors
Affordable housing is further from reach than ever, and things are not going to improve any time soon, because an alarming number of new builds and starter homes are being sold off to overseas investors. One report claims it has tracked down everything from new-build studios in London to period terraces in northern towns being marketed to investors in China and Russia.
The experts have long-argued that a lack of affordable housing is a major factor in the housing crisis, and that we need more new properties to be built for this end of the market - quickly. An estimated 240,000 houses a year are needed to address the shortage, but fewer than half of this number of being built, and now this new trend is set to make matters worse. It doesn't matter how fast affordable housing is built, if starter homes and well-priced properties are being snapped up by investors from overseas.
The Daily Mail has reported that foreign investment fairs, and estate agents in China and Russia, are advertising these properties to overseas buyers. It added that one agent said the number of homes being bought for cash has increased by a fifth in the past year - as the proportion of overseas investors rises.
The Guardian reported earlier this month that one of the biggest developers, Galliard, was advertising properties on a development in Hounslow to Hong Kong buyers, a week before they hit the UK market. Galliard argued they weren't favouring Hong Kong buyers, because only 60 of the 160 properties were on sale at the event, and because a separate marketing drive for UK buy-to-let investors had already been launched
The demand reflects the experiences of Britain's biggest buy-to-let landlords, Fergus and Judith Wilson, who said they have been approached by buyers in China and Russia - and expect to sell their property portfolio to a Chinese investor.
The think tank Civitas has warned that at the moment 27% of new-builds in central London are being snapped up by overseas buyers, and while the number drops drastically outside central London, overseas buyers remain a worrying new force in the starter home market. It has called for a curb on foreign ownership of UK property.
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Clearly there's a developing trend in the capital. However, there will be plenty of people outside of London who aren't entirely convinced that Chinese and Russian investors are poised to snap up two-bedroom terraces in northern towns
In many sellers' experience, there's no-one at all posed to snap up their affordable property. It still takes an average of more than eight weeks to sell property in the North East, North West and Yorkshire and Humberside. To secure a sale, most areas are accepting a 5% cut on the asking price, and for the last few months the number of buyers registering with agents has been dropping steadily.
If you asked any of the people struggling to sell in these areas, they'll tell you there's hardly exactly an influx of foreign investors in their home town - and if one came along right now they'd welcome them with open arms.
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