By Staff writer
Move comes as Middle East investors spend $4.7bn in London real estate in 18-month period from 2015 to end-June this year
London's mayor Sadiq Khan will launch an inquiry into foreign ownership of property in the British capital which has helped push up housing costs, the Guardian newspaper has cited him as saying.
"It's clear we need to better understand the different roles that overseas money plays in London's housing market, the scale of what's going on, and what action we can take to support development and help Londoners find a home," the Guardian quoted Khan as saying.
"That's why we are commissioning the most thorough research on this matter ever undertaken in Britain - the biggest look of its kind at this issue - so we can figure out exactly what can be done."
The comments come after a recent report by CBRE revealed that Middle East investors had spent $4.7 billion on property in London in the 18-month period from 2015 to the end of June this year.
Only New York ($6.5 billion) was a more popular destination for investment from the Middle East.
CBRE said that between 2008 and H1 2016, Middle East accounted for 22.6 percent of cross-regional investment in the world's 25 most popular cities for foreign acquisitions. In absolute terms, London ($28.5 billion) has seen by far the most investment from the Middle East.
London property prices rose more than 12 percent in the 12 months to July, according to official data.
Last month, a report by Cluttons said GCC-based high net worth individuals are set to continue investing in London for the remainder of the year.
The third instalment of Cluttons’ 2016 Middle East Private Capital Survey showed that London, New York and Singapore are the destinations of choice - outside of the Middle East - for the region’s wealthy.
The mayor's office has no powers over taxation of property in the city.
The Guardian said Khan's inquiry would focus on the scale and impact of different types of overseas investment in London and consider how other major cities around the world are tackling the problem.
* With Reuters
They are going to publish the names of Foreign Owners (individuals and companies) on a website that is accessible by the Public. That will be good and transparent so we can see how much black money there is.
What a waste of public money. Rich individuals who want to hide their wealth will buy through shell companies, the mayor doesn't have endless resources to complete forensic accountancy analysis on each and every company. What are they going to do anyway shame the rich into giving up the properties, stop them from buying in the first place or do a Robert Mugabe and take the mansions and give them to the poor? Why not concentrate on defining eligibility for affordable housing and work on building those units.
Most of these will be held by special purpose vehicles (SPV's) with companies in BVI or Cayman etc. physically holding the asset. The privacy rules in these jurisdictions means that you cannot get behind the company to see who actually controls or owns it.
Any special register would be a breach of privacy surely but you can always look on the public register if you have the time or inclination.
Tax rules are changing fast to stop offshore companies from avoiding inheritance tax etc. but to these mega-wealthy individuals and families, it is a relative pittance.