More than 50% of large London properties bought by foreigners

HAMISH_MCTAVISH

Savills said that what was eye-catching was that international buyers, who previously had dominated the market for properties worth £2 million or more, were starting to look at less expensive homes, down to £750,000 – the price of a four-bed home in many parts of London, not just the very centre.

And the law of unintended consequences strikes again.....

You wanted a crash. You can't have a crash without a recession. A recession is going to drive down rates and weaken the pound. And as a result, UK property looks cheap to overseas investors, they flood in, and prices rise. First in high prices areas, and then the ripple effect starts. Now it's ordinary houses in London, then the people that sold those wll buy further out with that big pile of cash, and so on, and so on...... London may lead the country out of crashes, but the rest follows every time.

And in the meantime, mortgage rationing has prevented most FTB's from taking advantage.

But seriously, !!!!!! did you think would happen?

That they'd be giving away houses free with every pack of cereal?

chucky

HAMISH_MCTAVISH wrote: »

And the law of unintended consequences strikes again.....

You wanted a crash. You can't have a crash without a recession. A recession is going to drive down rates and weaken the pound. And as a result, UK property looks cheap to overseas investors, they flood in, and prices rise. First in high prices areas, and then the ripple effect starts. Now it's ordinary houses in London, then the people that sold those wll buy further out with that big pile of cash, and so on, and so on...... London may lead the country out of crashes, but the rest follows every time.

And in the meantime, mortgage rationing has prevented most FTB's from taking advantage.

But seriously, !!!!!! did you think would happen?

That they'd be giving away houses free with every pack of cereal?

but you could have price drops in real terms though without a recession.

these threads are like car crashes - why does Brit do this to himself...

chewmylegoff

firstly many of the foreign buyers are actually living and working in the city, they are just foreign nationals.

secondly, if it was 45% in 2007, when volumes were much higher, and it is 55% now, then the actual numbers of foreign buyers are lower than they were in 2007, so you can spin this story either way.

new_home_owner_3

brit1234 wrote: »

Yeap the billions spent by them in 3 weeks holiday on ice cream is crucial to our economy.




Rather than investment in our economy I think its more asset protection at our expence.

that ice ceam looks nice, ill be having a few of them in a couple weeks, off to spain for a couple of weeks to take in the football and chill......:D:beer:

new_home_owner_3

brit1234 wrote: »

London has been clearly seen as the main area of house price rises the last year despite low transactions. It seems that low interest rates aren't mealy bailing out buy to let and the reckless but has encouraged foriegn investors.

Hopefully with the tumoil in Europe and the increasing likelhood of higher rates here this will end.

Possibly we could have had bigger price falls a couple of months ago if it wasn't for the foriegn investors.

it just goes to show even people who dont live in this country think its a good idea to buy and i say fair play to them, if people in this country havent got the bottle to buy, let them clean up.:T

novazombie

brit1234 wrote: »

London has been clearly seen as the main area of house price rises the last year despite low transactions. It seems that low interest rates aren't mealy bailing out buy to let and the reckless but has encouraged foriegn investors.

Hopefully with the tumoil in Europe and the increasing likelhood of higher rates here this will end.

Possibly we could have had bigger price falls a couple of months ago if it wasn't for the foriegn investors.

Thats right, the Euro crisis is a temp hold up of UK house prices.

Its just a question of time for for base rate to go back up and our house prices will follow the USA decline.

Then these overseas property investors will want to pull out. They will have to try and sell for whatever they can get in a hurry.

Heyman_2

chucky wrote: »

these threads are like car crashes - why does Brit do this to himself...

It's not a problem for him, he just runs away when his rhetoric is shown to be bunk.

Linton

chucky wrote: »

but you could have price drops in real terms though without a recession.

...

Out of interest how do you think this could happen, or perhaps more to the point if it happened would it do anyone any good??

It seems to me ....

In most of this country we have a lot of people who would like to buy and a shortage of supply. In addition people are willing to pay as much as they can afford to buy as good a house as possible.

In these circumstances the only reasons for a price drop are...

1) Reduction of demand by recession - ok prices fall because people can afford less, but it doesnt do ftbers much good because what they can afford drops in proportion.

2) Reduction of demand by social change: eg potential ftbers decide they would rather live in high rise rented flats. Seems like a good idea to me - use the empty flats and reduce the demand for houses. But I cant see it happening.

3) Reduction in demand by decrease in population - I guess any short term change to this could be a little drastic.

4) Increase in supply by removal of planning restrictions - cant see the nimbys voting for that.

5) Increase in supply by increase in public sector housing - cant see that happening for the next few years.

In the (IMHO extremely unlikely) event that houses did drop in price without a parallel drop in the ability of ftbers to pay, what would happen? Would the ftbers say - "wheee, there are cheap houses on the market, lets buy". Dont think so - its far more likely that they would see these cheap houses as below their perceived status and therefore undesirable, and then be unhappy because they couldnt afford large 4 bedroom detaches in "nice" areas.

System

I'm not sure what to make of this until I can see a comparison with other capital cities.

chucky

Linton wrote: »

Out of interest how do you think this could happen, or perhaps more to the point if it happened would it do anyone any good??

inflation (higher inflation if it comes along) will it probably help people that already own more than anyone else i guess

inflation isn't good for savers and inflation reduces your disposable income leaving you less to save. this probably affects FTB's more than anyone as they are saving for a deposit.