In recent years, one of the Millennials’s main gripes is the fact that UK house prices have risen far beyond what many of them believe they will ever be able to afford. One of the reasons they have cited for this increasingly harsh economic climate is that there are too many overseas owners and landlords of UK property, particularly in London. One of the recent backlashes against these overseas owners and landlords was in the wake of the Grenfell Tower fire, when Labour were calling for many of these luxurious homes to be seized by the Council.
The statistics, however, give a very different narrative from that of the mainstream media. Countrywise, the UK’s largest property company, letting around 90,000 homes, have advised that now only 5% of properties belong to overseas owners, compared with 12% in 2010 (although it is possibly worth noting that they do not state whether any of those have subsequently gained UK residency). In London, overseas ownership has dropped from 26% to 11%, with investors looking to buy in less expensive areas of the UK. European ownership has dropped the most (from 39% in 2010 to 28% in 2016), now with investors from Hong Kong being the most dominant in the current market. The most likely reason for this drop is due to the UK’s offering unattractive levels of taxation to investors.
Despite this, house prices have increased above inflation levels from 2013-2016. In light of that fact, it is important for thought to be given as to the state of the UK housing market and the source of escalating prices, if foreign investment can no longer be blamed. As much of this data was also gathered pre-Referendum, it is unlikely that Brexit can be blamed, at least to a large extent. Economists in particular might be interested to consider the extent to which the UK economy relies on the housing market, and any implications Brexit may have in terms of foreign investment.