Sunday, 12 May 2013

Are foreign buyers easing the crisis or part of the problem?

Jones La Salle believes the answer is the former:

“Post-credit crunch it’s much harder to get bank debt but with 30pc to 40pc of units sold 'off plan’ to foreign buyers, that triggers work on the development,” Mr Challis said. “Without international investors most residential developments in London wouldn’t happen and the housing crisis in the capital would be even greater.”  Source

That argument sounds plausible but when the raw numbers are that over half of all new properties in London are purchased by foreign buyers, up 25% from 2011 representing £3bn alarm bells should be ringing.  

If nothing else this wave of foreign cash is likely to recede over time leaving a serious question mark over where the buyers will come from.

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