To think foreign ownership of UK property should be tightly controlled?

[Arnoldthecat]

For those who live in the Manchester area, you cannot fail to be aware of the plethora of cranes that are swinging on the city skyline.

Over recent years Manchester and its borders with Salford have been subject to massive development,mostly involving the construction of tower blocks of flats.

The vast majority of these blocks are being financed by foreign investment, mostly from China and the middle east.

It often isnt possible to buy them off plan as an individual as they are already sold before a spade has been put in the ground.

Why is this happening? Well interest rates are low and due to QE and other factors in the global economy, investment companies are desperate to convert their intrinsically worthless paper money into tangible assets.

China is a mega global economy. It has a great disparity between rich and poor. It has a population of about 1.5 billion and a GDP of around $27.5 trillion. Strangley his only translates to around $19,000 per capita.

Essentially millions of chinese live poor lives,are paid little and exploited for the wealth of the elite. That money has to go somewhere.

On a local news program this evening, there was a feature about local mancunians being no longer able to afford housing. Mr Richard Leese, leader of the City's Labour council was asked about it. He deliberately dodged the issue by saying he welcomed foreign investment to the city.

The absolute truth is that Government and local authorities are very happy to welcome foreign investment to build flats because it brings them more income. What they dont care about is that foreigners are turning our OWN people into renters who will mostly never be able to afford a home in their lives.

The British people are becoming slaves to Chinese investors.

The programme researchers picked one particular block in the city and obtained the land registry details for all the flats in the block. The vast majority were owned by investment companies based in China, singapore, Jersey and the British Virgin Islands..only a handful were owner occupied and clearly the rest were rented out.
Why doesnt our Government do something for its own people??

Why is foreign ownership a problem? Surely it’s the fact that large companies are buying up the homes that’s a problem, shutting out individuals and families. Where the companies are from is irrelevant.

To look at it another way, we rent out our old house in the UK, as we plan to move back to it in a few years. Is it more problematic because we moved abroad or would you have the same opinion if we had moved within the country?

It depends on what you mean by "foreign" purchase?

I believe that if you come over here to work or live and want to buy a house then go for it.

I don't agree that foreign investors (that don't live in the UK) should be able to buy a property before anyone actually living here (from the UK or not) gets a look in.

I think in any development only a certain percentage, eg 20% should be able to be bought 'off plan' and then there maybe should be a period of 6 months for UK based buyers (proven by eg a council tax statement) to buy, then offered out to foreign investors.

So I don't disagree with foreign investment per se as a lot of these developments probably wouldn't even happen without it. But I agree its not fair when anyone who lives here doesn't get a look in.

I think there’s a nasty undertone to this post

OP has a point. We've had some major rebuilding where I live, all Chinese money, almost all the flats are empty - this was previously land and building which were council owned. Not now.

I think the OP is referring to overseas resident venture capitalists ripping the heart out of city centre and town centre communities in the UK, to the detriment of local communities?

@NameChangeNugget I know what you mean, I too have a knee jerk dislike of anything possibly anti foreign and am very much bleeding heart, let them all in, we should be flattered people from elsewhere want to come here.
However this is nothing to do with people coming here. Investors with nothing to do with this country or interest in coming here buy off plan as a way of investing. Our dcs can’t afford property because the market is inflated by overseas investors buying as a safe place to invest their money. They’ll never live here.

Yes. Except 25yrs ago was the time to get angry when they were lining the pockets of junior councillors and paving the way to their future project approvals.

I live in Portugal and the same issue is happening here (mainly in the Algarve). With people moving here because of advantageous tax breaks, the rental prices and property prices are rising. With a minimum wage (which is pretty normal among the workers in the Algarve) being 700 euros a month before tax, and rental of a two bedroom property shooting up from 300 a month a few years go to nearer 700 per month, you can see how this is causing issues. And with high rents, most Portuguese have little or no possiblity to find a deposit in order to purchase a property.

Totally agree OP. Lots of countries don't allow foreign nationals to buy property (New Zealand just introduced a ban on foreign ownership of property and I am pretty sure China is very strict about who can buy property there) and it is done to protect the native population so that they will still be able to afford local housing and not turn it into an asset for rich people who don't need to live there to buy and sell at a whim to make a quick buck.

It's colonialism. And it's China's turn now.

Yup. Or at least being advertised for sale in the UK in the first instance / first refusal for residents. Or prohibitive SDLT for non-residents. Or the need for a certificate for a particular property allowing right to purchase (a la Austria). Very easy, sustainable things that can benefit local people.

The UK needs more housing. Investors are building some that wouldn't have been built without them. It's irrelevant where the money comes from, it's good that new housing is being built.

It's not a problem if new housing is rented, no-one whether renter or buyer is worse off as a result of extra housing being added to the UK housing market. (Existing owners might not like it if there's enough building to lower the price of housing, but many people would think that scenario is a good thing.)

This has always been the case. Russians, middle Eastern and now the Chinese. Before that it was Americans, French and Japanese buying up industry. And of course the rich in this country own huge real estate assets. The international super rich see this country as incredibly stable and I read they treat the real estate here almost like gold so often don't bother to let it out and certainly have no plans to live here. Where we are a lot of flats are struggling to sell, nobody wants them and Brexit probably makes us look less stable.

My view is that the Government should put a charge on these empty flats which doesn't apply if they rent them out. This may encourage them to sell as not worth bother of being a landlord or alternatively flood market with rentals making rents cheaper.

I would say that if foreign investors were forced out, there are plenty of home grown professional landlords that would buy these places up if prices fell as a result.

YANBU. I hope we follow NZ's lead.

The problem is that these flats are built just to take advantage of the UK's price rises. A couple of years ago I read an article about this exact issue in London, the main point being that the Chinese don't like anyone living in their investments so they end up empty.

There's a lot of absentee Chinese, Malaysian and Nigerian investment in developments like student housing blocks in city centres also, running parallel with some fairly disastrous financial decisions from various English colleges and universities in those spheres.

It's actually reverse investment for the UK because of the institutional losses and the losses to employment and living space in city centres.

Local Plans were supposed to prevent this happening, but they were too weak.

Any place dependent on one type of industry, one kind of investment or one employer is very vulnerable.

Investors looking for profit, will pull out as soon as profits look like they've peaked.

Building sites can be abandoned and jobs can lost within weeks.

Power companies are mainly foreign owned; now, that's scary.

Wolverhampton Wanderers is owned by a Chinese consortium who are making noises about what might happen if redevelopment plans aren't approved.

Eastern European building companies are moving in as well.

This started in the 80s, when the Conservatives started selling off our utilities on the Stock Exchange with no restrictions on who could buy shares.

I don’t think the OP is objecting to foreigners, coming here, buying houses and actually living in them but rather the swathes of overseas companies who buy lots of properties and then leave them empty (and often don’t even rent them out as too much hassle) and then sell them in 5 years or so to make a profit.

In most overseas countries in order to buy property you have to prove either current residency or owning a legit company there.

The UK needs more housing. Investors are building some that wouldn't have been built without them. It's irrelevant where the money comes from, it's good that new housing is being built.

The UK needs more affordable and council housing, not empty yuppy flats that exist to inflate.someones asset portfolio.

Absolutely agree. There should be punitive taxes on properties bought by anyone who isn’t either a UK citizen or has a job here, and there should be additional taxes on properties left empty for more than a certain period. An additional problem is that this encourages developers to spend all their energy on building homes that aren’t fit for purpose, like the towers going up in Salford that have no balconies. People don’t want to live in them, they will just be enormous Chinese and Russian piggy banks.

Are you also proposing that the Brits are prohibited from buying properties in Spain and Portugal?

I believe they are being used as a store of wealth by foreign invesco's and they are being encouraged by tax breaks and grants. This is crazy. We should be having uk investment in building quality decent affordable homes for our own populace . I firmly believe IT IS a problem that they are mostly for rent because the uk populace,seeking a decent home ,are being forced to rent and are therefore not building up any equity.

There is nothing more comforting than having a legal right to reside in your own home that you own as long as you pay the mortgage.

Someone else said a lot of these places are empty and its very true. Ride the metrolink into Manchester at night and see how many lights are lit in these blocks.

What is needed in this country are good quality,decent affordable homes for the majority and not to put existing and future generations in thrall to ruthless investment companies and ever increasing rents/service charges for shoe box flats with very little space.

Local authorities such as Manchester Labour should hang their heads in shame at what they are allowing but then Labour has form for it. It was their very own Mr Prescott who championed the pathfinder scheme which saw thousands of homeowners thrown onto the street,their homes demolished and the land sold to private developers.

Firstly to pretend this investment in the north is a new thing is missing the point, there are countless examples of foreign investment being involved in the building of accommodation and foreign ownership bulk buying flats in the northern cities long before 2008, so we can wipe away the undertone of "Tory government".

We have to accept we are part of a globalised economy, unless you want to go down the full isolationist route its far more complex.

As an example, before the crash in 2008 the Guardian ran a full middle page spread about how a new build riverside development that was funded by foreign investment in my home town in lincolnshire was a great investment as the prices asked far outstripped the local wage by approx 7* joint salary, so the rental income was a winner.

It's neoliberalism that's the issue here, the nimby's/ expecting ever rising house prices electorate are the issue, that cuts the right/left divide and no political party wants to be in charge during the correction.

There is no magic bullet scenario.

Are you also proposing that the Brits are prohibited from buying properties in Spain and Portugal?

If it is preventing local people from being able to afford to buy or rent, yes.

justanotherlurker There was no undertone of Tory Government intended and it must be only your perception. The last time i voted Labour was for Kinnock and i lean toward Conservative ! If foreign investcos want to invest here then let them invest in building decent affordable homes for sale at fair rates. This would be welcome as our own successive Governments seem incapable of creating this environment.

Of course the investcos dont want to do this. No,they want a tangible asset which appreciates in value and has continuing and increasing returns year on year.