The London Assembly has raised concerns about the impact of foreign investors on the capital’s housing market, highlighting that these ultra-wealthy individuals are driving up property prices and contributing to a significant number of vacant homes.
According to data from the Ministry of Housing, Communities and Local Government (MHCLG), there were 105,138 empty homes in London in 2025, representing 2.7 percent of the total housing stock. This figure marks an 81 percent increase since 2016. While the number of empty homes owned by local authorities has risen, a staggering 88 percent of these vacant properties are privately owned.
Foreign Buyers Dominate Luxury Market
During a recent meeting of the London Assembly Housing Committee, it was reported that overseas investors are now the primary purchasers of the city’s most expensive properties. Dr. Jonathan Bourne, an Honorary Research Fellow at the Centre for Advanced Spatial Analysis at University College London, emphasized that this trend is exacerbating the housing crisis in London.
„The people who would be living in luxury houses – stockbrokers, partners – now cannot afford to,“ Dr. Bourne stated. „So they get pushed out into a nearby area, and that’s what causes this ripple. The international super-rich can afford to spend more than the London super-rich.“
Dr. Bourne explained that while the overall number of empty homes may not seem large, their concentration in affluent areas significantly affects the housing market. He noted that high levels of vacancies in specific neighborhoods create intense demand and price bubbles that extend outward.
Housing Market Dynamics
Dr. Bourne pointed out that there are no empty homes in the most affordable parts of London, while the least affordable areas experience much higher rates of vacancy. He criticized the current focus on housing supply, arguing that City Hall should collaborate with developers to make new properties less appealing to foreign investors.
„We cannot ignore London’s position as a global prime city and the financialization of the housing market – it’s conceivable we risk a ‘doughnut’ London, where people move from the center to the outskirts, because they cannot afford a family home in areas where they’ve grown up in,“ he added.
Policy Responses and Recommendations
The Mayor of London has initiated measures to tackle the issue, as outlined in the 2021 London Plan. This plan encourages boroughs to promote the efficient use of existing housing stock to reduce the number of vacant and under-occupied dwellings. It also supports boroughs in addressing the problem of newly constructed homes being left empty, often referred to as „buy to leave“ properties.
However, Dr. Bourne suggested that more radical actions are necessary to prevent the ongoing hollowing out of the city center. He criticized the current empty homes surcharge, which adds extra council tax to unoccupied properties, arguing that it fails to significantly impact wealthy investors.
He proposed a system similar to Vancouver’s, which charges a percentage of a property’s value annually while it remains empty. However, he acknowledged that the absence of a detailed housing register in London could complicate the implementation of such a measure.
Building for Residents, Not Investors
Dr. Bourne recommended that City Hall focus on altering the types of homes being constructed to ensure they are affordable for residents and unattractive to investors. Deputy Mayor for Housing Tom Copley defended the Mayor’s record, asserting that many of the so-called „luxury“ flats being built are essentially ordinary flats priced at a premium.
„The primary way of resolving the housing crisis is delivering the social and affordable homes that Londoners need,“ Copley stated.
He acknowledged that while the Mayor does not have direct authority over empty homes, recent Right to Buy-back programs have enabled councils to repurchase approximately 2,400 homes, many of which may have been vacant.
Conclusion
The ongoing influence of foreign investment in London’s housing market continues to raise alarms among local officials and experts. As the city grapples with a housing crisis characterized by rising prices and increasing vacancies, the need for effective policy interventions becomes ever more pressing. For instance, London faces potential £15 billion annual costs from climate change by 2050 and a £28m government-let London office hits the market.
„`
Quellen: standard.co.uk
Bildquelle: Shutterstpck / Volodymyr TVERDOKHLIB
