Role of Overseas Investors in London Housing Market

INTERNATIONAL
INVESTMENT IN LONDON
RESIDENTIAL MARKET
EFFECT

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUCTION...........................................................................................................................1
1. Presenting and evaluating the role of overseas Investors in London Housing Market...........1
2. Social and economic aspects of the international investment in the London residential
market..........................................................................................................................................5
3. Evaluating the implications of foreign investments on the prices of London’s housing
market demand and supply..........................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
It could be seen that the movement of the capital into the residential properties are most
notable looking at key global cities. The overseas investors are interested in making investments
in the real estate properties. London is considered to be the safe heaven by the majority of the
real estate investors due to the stability ion political and financial market. Investments in the
residential properties are made after the global financial crisis. This increased the investments in
real estate of London. The investments are made due with the motive of earning high returns
over their investments. Report will include the role of foreign investors on the foreign housing
market of London. It will also provide the social and economic impacts of the international
investment on London market. The current study will also shed a light on the housing price of
London and determine whether international investment in London Housing market is beneficial
or not. Report’s main aim is to develop a deep understanding of London Housing market. Entire
study is based upon secondary research in which latest books, articles and Journals are chosen.
For that study will evaluate the role of overseas investors in London Housing market. Further,
report will also determine the social and economic aspects of international investment in London
Residential market and critically evaluate the implications of foreign investment in London’s
housing market on price, demand and supply.
1. Presenting and evaluating the role of overseas Investors in London Housing Market
Foreign investment is contributing the major portion upon the local housing demand’s
prices in the London’s housing market. This prices are completely depend upon the market’s
such that in the current scenario, the prices of the London is decreases because of the pandemic
disease i.e. Coronavirus. But secondary research shows that in London, the prices are increases
as compared to the rest of Britain’s Economy. Further, the report off Kings College Housing is
also shows that houses price of UK is increasing from 1990 onward. While on the other side, on
supply side, lack of available land for construction and some regulatory constraints i.e. planning
delays and ban are also contribute to the house price appreciation. That is why, in 2004, the
government of UK review on housing supply and concluded that much higher rates of housing
building is necessary to reduce trend rate of house price growth.
The invitation to tender is known as an overseas buyers or else, they are the purchaser
who is resident overseas. Also, the sales of overseas buyers is higher because a briefing paper for
1

Parliament written that they overseas buyers is highest in Central London and declines rapidly
with a distance from a center (Eichengreen, Jungerman and Liu, 2020). Also, this proportion is
higher for new buildings as compared to existing units. The interview conducted under the article
in which top developers and other stakeholders are selected under a small survey in which it is
clearly analyzed that overseas sales are highest as compared to the business who are relatively
concentrated in the areas. Thus, it provide a clear indication of the relative importance of sales to
overseas buyers and their price point as well as special patterns.
As the secondary research also shows that prices of houses in London are continuously
increase because as per the foreign investment, it is estimated that property prices in 2014 were
around 174,000 pound which excluding the foreign investment. So there is a huge difference in
the foreign investment which is being focused in London such that prime London Borough in
which a large number of houses are owned by the overseas investor and these houses were also
sold up to 1.3 million pound in 2014 (Holthus,Kebschull and Menck, 2020). Therefore, this
figure shows that there is a high demand of foreign investment in London so that people use
these houses for their own use and there are large number of housing project in London are
introduce that are affordable for the people of London and this also shows the positive impact of
international investment in order to keep operating the market of Central London at the time of
critical times.
The information provided the major international estate agents suggested that London
overseas buyers accounted for fewer than 20% of sales of new- buildings. That is why, the sales
were higher in central London as compared to rest of the capitals (The role of Overseas investors
in London new – built residential market,2017). Article also suggested that the role of overseas
investors for new homes in capital is important. Such that in 2015- 16, new house were
completed in London in which 17,000 were used for private sector. This figure is high as
compared to previous four years. The below graph also shown that the sales proportion of house
has risen with 13% from 1995.
2