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“Foreign investors and their influence on London”

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Published: 02/11/2013   Last Updated: 02/11/2013  
Tags: Foreign Investors And Their Influence On London

As London continues to thrive and be celebrated as the most ethnically diverse city in the world, it’s attraction from foreign investors seems to be growing at a rate of knots.

Now of course this is good for our economy, but it has its flipside; as property prices get pushed up, the people of London are being pushed out (London property buyers that is). And as we meet more potential buyers and read more in the press, this is becoming an all too familiar story.

Why is this happening I hear you ask?

Well, with the banks competing to offer the “lowest interest rates yet” and a surge in property prices, current homeowners are more inclined to keep their property and induct themselves into the “Let to Buy” scheme.

What is this scheme?

Homeowners who purchased 5 or so years ago are releasing the equity on their properties in order to use the gained equity (plus any savings) to buy a new home. They then use the rental income from the first property to help with the repayments of the new house.

So as the scheme continues to spread, available property will decrease and the demand from both local buyers and foreign investors will intensify, resulting in an inevitably rise in property prices.

And just to add fire to the flame; what is most definitely a reality (albeit a scary one), is that soon, we will consider a 500k, 1-bed property to be of a reasonable price.

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