Introduction:
A recent report by Benham and Reeves, a renowned lettings agency, has revealed that foreign homeowners possess a staggering £84.2 billion worth of property across England and Wales. Unsurprisingly, the majority of these properties are concentrated in the bustling capital city of London. The study, which combined data from a Freedom of Information request to the Land Registry and information on properties registered to overseas companies, sheds light on the extent of foreign ownership in the region.
The Scope of Foreign Ownership:
According to the research, there are approximately 280,021 homes in England and Wales registered with an overseas correspondence address or to an overseas company. With the average house price in the region currently standing at £300,636, the total estimated value of these foreign-owned properties reaches an astonishing £84.2 billion.
London’s Foreign Property Dominance:
London reigns as the preferred destination for foreign homeowners, boasting a significant portion of the foreign-owned property market. The City of Westminster, in particular, takes the lead, with an estimated property worth of £14.9 billion. Kensington and Chelsea follow closely behind, with a combined property value of £12 billion. Other prominent areas in London with substantial foreign ownership include Tower Hamlets (£4.8 billion), Camden (£4.1 billion), Wandsworth (£3.8 billion), Hammersmith and Fulham (£3.3 billion), Hounslow (£2.3 billion), Lambeth (£2.3 billion), and Islington (£2.4 billion). However, it is noteworthy that Buckinghamshire is the sole region outside of London to feature in the top 10, ranking seventh overall with an estimated property value of £3.2 billion.
Insights from Benham and Reeves:
Marc von Grundherr, the director of Benham and Reeves, highlights the notable 3.2% increase in foreign homeownership over the past year alone. He notes that this surge primarily stems from individual buyers rather than offshore entities. Von Grundherr points out that London continues to be the favored destination for foreign homeowners, with Hong Kongers being a prominent nationality among them.
The Vital Role of Foreign Buyers:
Von Grundherr emphasizes the significant contribution that foreign homeowners make to the property market’s overall value. He believes that despite the current economic landscape, this interest has remained strong in 2023, and foreign buyers are likely to provide a much-needed boost to an otherwise sluggish property market throughout the year.
Rental Market Investment:
It is important to note that a substantial portion of foreign interest in the property market comes from investments in the rental sector. Von Grundherr suggests that the government’s failure to address the housing crisis and deliver sufficient housing stock has created an opportunity for foreign investment to meet the nation’s rental housing demand. Therefore, this influx of foreign investment not only contributes to the market’s value but also provides essential homes for tenants across the country.
Conclusion:
Foreign homeowners in England and Wales currently hold an astounding £84.2 billion worth of property, with London dominating the scene. Benham and Reeves’ research sheds light on the magnitude of foreign ownership and its impact on the property market. While concerns may arise regarding the potential implications for domestic buyers, it is crucial to recognize the valuable contribution that foreign investors make to the market’s vitality and the provision of homes for tenants. As we progress through 2023, it is anticipated that foreign buyers will continue to revitalize the property market, providing a much-needed boost amidst challenging economic conditions.