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Foreign investors forcing London rents to unaffordable levels, warns Tory MP

Evening Standard logo Evening Standard 08/12/2022 Rachael Burford
Peel Hunt financials © PA Archive Peel Hunt financials

Foreign investors buying up London property are forcing rents to unaffordable levels and contributing to a “perfect storm” housing crisis, an MP has warned.

Private rents in the capital have skyrocketed by an average of 17 per cent in the 12 months to August, London Councils said.

Local Housing Allowance (LHA) rates, which low income tenants can claim to help with housing costs, have remained frozen since 2020.

Tory MP for Harrow East Bob Blackman said buyers from abroad were snapping up new properties, often to let out,and reducing the number of homes available for Londoners to buy or rent at affordable prices.

He claimed the Battersea Power Station development was an example, saying that when he visited the project a sales manger told him that the majority of flats had been sold to Singaporean investors.

"What happens is a perfect storm of external buyers who then rent the properties out at extortionate rates and this is why the local housing allowance has an issue," he told the APPG for London's Homelessness Briefing.

"People can't afford the rents, they claim housing benefit. So our treasury, our taxpayer money has to subsidise foreign owners, which can't be right."

A slump in the pound after Liz Truss' disastrous mini budget last year saw US investors plough cash into UK property, with London a key target for overseas buyers

Some 95,000 residential properties in England and Wales are registered to offshore owners.

Almost half of these are in London, with many concentrated in central areas.

In the borough of Westminster alone, more than 12,000 homes are in overseas ownership.

Other inner London boroughs, such as Tower Hamlets, Newham and Lambeth, have also had steep rises in the number of foreign investors snapping up properties.

London Councils said local authorities were limited in the number of private properties they can place people in because LHA will not cover the costs of most rental properties.

A spokesman said a rise in LHA payments would help the housing crisis in the short-term, but "in the long term, more homes will need to be built, specifically more affordable socially rented accommodation".

A spokesman for Battersea Power Station said: “It’s factually incorrect to say that the majority of flats at Battersea Power Station have been sold to Singaporean nationals.

“In fact 85% of the flats sold at Battersea Power Station over the last 18 months have been bought by people based in the UK.”

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