London’s new mayor, Sadiq Khan, has issued a stark warning that he won’t allow the city’s housing market to be dominated by wealthy foreign investors.
Mr. Khan, a Labour Party politician who replaced Boris Johnson earlier this year, today slammed his predecessor for failing to prevent London homes being sold as “golden bricks” overseas.
Mr. Johnson’s so-called “Concordat” scheme was designed back in 2014 to stop major developers from advertising London homes abroad first, many months before ordinary Londoners had the chance to purchase them. At the time, more than 50 developers signed up to the pledge.
However, Mr. Khan has labeled the scheme “toothless” as homes could still be launched overseas at the same time they were made available in London. There was also no official process of monitoring whether the signatories were keeping to their promises, he says.
“The previous mayor’s ‘Concordat’ is yet another housing failure we have inherited -- a scheme that claimed to help Londoners get first dibs on new properties but in reality did nothing to stop the problem of London homes being sold off-plan as gold bricks to overseas investors,” Mr. Khan said.
“I am determined to give more Londoners ‘first dibs’ on more new and affordable housing, and have asked officers to bring forward a range of meaningful options to replace Boris Johnson’s failed, frankly embarrassing attempt,” the mayor said.
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According to Hamptons International, a U.K.-based brokerage, foreign buyers made up a quarter of all London home sales in the first quarter of 2016, down from 32% a year earlier and a five-year average of 30%.
Demand for luxury homes in London has fallen among international investors thanks to two unpopular property sales tax hikes and uncertainty surrounding tomorrow’s Brexit vote.