An Oxford University report claims that house price rises in parts of London can be attributed directly to high-end buyers sheltering their money in ‘safe haven’ bricks and mortar after political turmoil in their own countries.
"This goes a long way towards explaining why London house prices have continued to rise at a disproportionate rate compared with the rest of the country, and can also shed light on the well-known fact that capital flows appear to go 'uphill' from relatively poor to relatively rich countries" claims the report authors, Tarun Ramadorai and Cristian Badarinza.
The report suggests that financial and political uncertainty in past decades led to significant levels of Chinese, Middle Eastern and Russian purchasing of London property.
Since the Euro-crisis and global downturn seven years ago, they have been joined by Italians, Spaniards and Greeks.
The researchers used house price and transaction data from the Land Registry, the Office for National Statistics and the Nationwide building society, cross-checking them against the dates of international economic and political crises.
Comments
"Which Estate Agent would advise their FTB offspring to buy In london right now? loaning their kids a £90,000 deposit and signing up for a £360,000 mortgage?"
£450K in London? They should be so lucky. Have a look at what more than twice that will currently get you...
http://www.rightmove.co.uk/property-for-sale/property-42016234.html
Thankfully we have the word from The Powers That Be that there is currently no bubble in London. Perhaps they should raise the £600k Help To Buy upper limit?
Up to WW1, a significant acreage of Paris was owned by Russians. They must have seen it all coming. High London property prices may be the least of our woes.
Errr George Daws explained all this to the HPC crew 4 years ago when explainingg why prices would not crash.
Have these students worked out that the BBC staff moving to Manchester from London and broadcasting 'BBC independant' news articles to support the notion might have some effect on prices. I wonder if they have noticed how much more quickly prices are now rising in all the places BBC staff are moving to. Manchester and Birmingham. Anyone care to guess what will happen when they have finished moving and interest rates start to rise?
Which Estate Agent would advise their FTB offspring to buy In london right now? loaning their kids a £90,000 deposit and signing up for a £360,000 mortgage?