The Role of Overseas Investors in the London New-build Residential Market

May 2017

The role of overseas investors in the London new-build residential market

LSE London has undertaken research on behalf of the Greater London Authority (GLA) to better understand the role of overseas investors in the London new-build residential market. The findings will help inform the development of policy in this area.

The team was asked to look at four main research questions:

- What proportion of new residential units in London is bought by overseas buyers?
- What proportion of these units is left empty?
- To what extent do the funding models of London residential developers rely on off-plan sales to overseas buyers?
- What is the role of major overseas investors (such as pension funds, sovereign wealth, debt providers, shareholdings) in the residential development process in London?

The research looked not only at how many units are sold to overseas buyers and how these units are used, but also at the potential importance of these buyers in enabling new supply, including the supply of affordable housing and the direct involvement of overseas investors in supporting new development.

Many of the questions are couched in quantitative terms, but the evidence available is relatively limited, often partial, and sometimes difficult to interpret. The research process was therefore rather like assembling a jigsaw using both quantitative and qualitative elements. Inevitably the results include some important gaps.

It is important to stress that the research covered only newly built private sector homes. It did not address the role of international investors in the much larger market for existing homes.

Client: Greater London Authority 

Authors: Kath Scanlon, Christine Whitehead & Fanny Blanc with Ulises Moreno-Tabarez

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