London housing supply 'at risk from overseas investment'
The London Assembly has warned mayor Boris Johnson that increased overseas investment could hamper the supply of housing in the capital
The Assembly has demanded research into the potential impact of overseas investment on the availability of homes for local people both to buy and to rent.
Its warning came as the mayor touted London investment opportunities at the MIPIM global property convention.
Recent findings by the Smith Institute found foreign investment in London’s private housing market more than doubled between 2009 and 2011, reaching an estimated £5.3 billion a year.
Assembly member Caroline Pidgeon said: ‘There is a real risk that overseas investment is creating an artificial housing bubble, inflating prices beyond the means of most. It is vital more Londoners aren’t locked out of the capital, their chances of being able purchase their own homes decreasing year on year as prices are pushed sky high. We need to understand the effect overseas investment is having on the housing market, especially in terms of price, affordable housing and supply of homes for Londoners.’
Assembly member Tom Copley added: ‘Affordable housing is a huge problem for Londoners. We need more knowledge on the effect of overseas investment and its impact on housing prices and supply. The capital is in desperate need of new housing, and we need to avoid some areas of London becoming ‘ghost towns’ as houses are bought for solely for investment rather than to be used as homes. We need to get away from looking at houses as assets and see them as homes instead.’
The research will contribute towards a future housing policy for the capital.
The Assembly has also called for an urgent review of the impact of government plans to change housing benefit amid fears it could stall the building of new affordable homes.