Think tank Civitas has called for UK buyers seeking London property to be given priority over foreign buyers, who it says should have restricted access to the capital’s housing market.
Low and middle income families are being priced out by wealthy buyers from Russia, Asia and the Middle East, Civitas claims.
Property developments are often launched overseas first, frequently meaning properties are sold out before domestic buyers get a chance to make a purchase. Critics of the current state of the London property market point out that property developments with a large number of absent foreign owners make areas less desirable, isolating the few owner-occupiers and reducing the sense of community.
It has also been claimed that wealthy foreign buyers are fuelling property inflation, pricing out millions of Britons. The average house price in the UK rose 8.4 per cent over 2013, boosted by a surge in December. The average cost of a London property is now more than £400,000. A recent report by Home Truths estimates that this figure could rise to £650,000 by 2020.
Just 27 per cent of central London property purchases were made by Britons in 2012.
Some developers are bucking the trend of selling to overseas customers, however, by targeting UK buyers with a view to creating real communities across London.
Civitas highlighted the current system in Australia, whereby overseas buyers must obtain permission to purchase a property.
London properties left empty for long periods are unlikely to be covered by regular home insurance, and should instead be covered by unoccupied property insurance.