Monday, 23 July 2012

Millions invested in Britain...apparently this is a problem


Seriously. Foreign investors are spending millions buying stuff in Britain - millions that flow into the economy. And some chap from The Smith Institute thinks it is a problem:

New research by the Future of London and The Smith Institute warns that unprecedented growth in overseas investment in London’s property market creates the risk of another housing bubble and is pricing out local people.

It seems that these very rich foreigners are buying expensive property in central London (this is apparently news to our authors) - presumably the same cash their stashing away in tax havens. And this (one has to giggle) is risking:

 ...pushing prices up and reducing the availability of homes to buy for local people.

The words 'utter nonsense' spring to mind. Twenty five years ago when I left London prices had already stretched beyond affordability for many folk - they either headed for jobs elsewhere as I did, lived in a grotty flat with six locks on the door or commuted 150 miles a day from North Kent, Bedford, Reading or Peterborough.

And whether some oil sheikh, third word kleptocrat or American film star spends multi-millions on a house in Begravia, Chelsea or Hampstead is really of no consequence at all for London's housing market. It seems to me that these authors are looking for anything to blame rather than the real problem - lack of supply. Stopping (no idea how) rich foreigners buying up expensive houses because London's a great place for the rich and the property holds its value is a daft idea.

If there are too few houses (and this is true in London is a way it isn't true in Leeds or Bradford) then we should be asking why government - local and national - persists in making it harder and harder for people to build new houses especially in places where people actually want to live. It's certainly a much better idea than moaning about millions in foreign investment!


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