In a report issued today, Civitas said international investors should be made to apply to a ‘housing investment agency’ for permission to buy in the UK. This would not be granted unless the agency believed that a genuine increase in the local housing stock would also take place.
It is intended that the effect would be felt most strongly in London and the southeast of England, which is particularly attractive to overseas investors and where rapidly rising prices have made house purchases unaffordable for many people.
The paper’s authors, Civitas director David Green and its communications director Daniel Bentley, said current government housing policy was focused on increasing the supply of housing, but it also needed to address demand.
‘London is one of the most – if not the most – attractive property markets for international investors all over the world. It is also a centre of an affordability crisis in the UK, which is having serious consequences for younger people and the less well off,’ the report stated.
‘It is time for the government to consider what can be done to tackle demand, alongside efforts to boost supply, to ensure that London property is not put forever beyond the reach of its residents by global capital.’
The paper, Finding shelter, cites Australia, Switzerland, Denmark and Singapore where similar controls on overseas investment are used to ensure purchases remain in the public interest.
It noted that house prices in London are now 14% above their pre-recession peak, while rents are also at record levels.
‘London property is now seen for many in terms of its investment potential, as a safe haven for cash in an unstable global economic climate, rather than something that should be meeting a basic social need for the capital’s residents,’ Green and Bentley said.
‘For too many it is providing financial shelter rather than human shelter.’
Civitas’s proposal would not apply to European Union citizens, as it would conflict with EU law. But the think-tank said much overseas capital invested in UK housing comes from beyond the EU.
