Foreign investment in real estate has led to increase in house prices in the UK

April 25, 2018 11:20 amComments Off on Foreign investment in real estate has led to increase in house prices in the UKViews: 11

UK house pricesForeign investment in real estate has led to increase in house prices in the UK, according to a study by King’s College London. Without foreign investment, the average house price in the country would have been around 174,000 GBP (245,115 USD), but the inflow of foreign money led to a price increase of 215,000 GBP (302,900 USD) in 2014, compared to 70,000 GBP (98,610 USD) in 1999.

Much of the price rise is due to investments through anonymous hollow companies registered in secret states considered tax haven.

Foreign investment has also negatively affected ownership of housing in the UK. They have not only increased the cost of expensive homes but also had a “leakage effect” on the rest of the market.

According to the authors of the report, the foreign investment is the reason why the largest price increase in the UK is reported in London and the southeastern part of the country. A similar phenomenon is also seen in some other cities like Liverpool and Manchester.

The analysis of property data shows that sales of foreign companies have had a direct impact on housing prices. An increase of 1% in the share of property sales to foreign companies, for example, led to an increase in prices in the region by 2.1%.

The British government has recently announced that people helping hollow companies invest in British property will be threatened with two years imprisonment and unlimited fine if the real estate owners are not advertised in a public register. However, the bill has not yet been submitted to Parliament.

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