Housebuilders Pledge to UK Buyers
Pre-selling and foreign investment vital – but UK buyers must have an equal opportunity to buy new homes in the Capital
Leading developers working in London today announced a new voluntary commitment to ensure UK buyers have every possible opportunity to buy new build homes in the capital.
The commitment comes as new figures show how selling some homes abroad is leading to the construction of thousands of desperately needed new homes for Londoners and delivering significant benefits to the capitals – and wider - UK economy.
The figures from a survey carried out by the HBF of eight companies responsible for 44% of new homes built in London last year, show that as a result of developments being built, or about to be built, with homes sold abroad;
Around 14,000 affordable homes are or will be built, cross funded by privately sold homes £49m was paid to London Councils in lieu of affordable home construction £365m is being paid to London Councils in Section 106 payments More than £2bn from abroad was invested into British based builders Government received an estimated £129m in stamp duty – an average of £39,000 per transaction 16,000 jobs were created
The survey results support previous research showing that 85% of properties bought by foreign buyers in Prime London were occupied with the figure considerable higher across the rest of the capital, so dispelling the ‘lights out London’ myth that homes sold abroad are left unoccupied.
The research reveals that, on all but a few ‘high end’ developments, when buyers aren’t actually living in the properties, they are renting them out - so helping alleviate the shortage of rental property in London.
Pre-selling a percentage of a development is often vital for financing developments. Without committed up-front funding, proposed developments are not viable options and would not get built – and London would lose the significant knock on benefits. But the industry is keen to ensure UK buyers have every opportunity to invest at an early stage.
To demonstrate its commitment to UK buyers, several HBF members operating in London have today signed a commitment stating that from January 1, all new developments will be marketed in the UK before or at least at the same time as abroad.
Whilst simultaneous or UK first marketing had applied to vast majority of developments, the survey found that developments that made up 11% of the new homes sold last year had been marketed abroad in advance of being actively promoted in the UK. Today’s announcement will ensure that this will not happen again.
Speaking today, Stewart Baseley, Executive Chairman of the HBF, said:
“Attracting up-front investment by pre-selling homes is absolutely key, and without it many developments would not go ahead. Selling some properties abroad allows tens of thousands of affordable homes as well as for rent and to buy, to be built for Londoners.
“London has an acute housing crisis and foreign buyers are playing a vital part in helping increase the number of homes being built in the capital. However, the industry wants to ensure that UK buyers have every possible opportunity to buy the homes being built.”
Quote from Mayor of London, Boris Johnson:
“Boosting housing supply in London is vital and whilst overseas investment is a long-standing and necessary part of any global cities housing market, it is important that homes are not exclusively marketed abroad before the UK. I welcome the Home Builders Federation efforts to get developers to sign a code of practice to ensure domestic buyers are not disadvantaged and repeat my call to mortgage lenders to extend offer lengths to nine months. It is right that new homes are made available to Londoners at the outset. In addition it is critical we continue to make every effort to boost house building and deliver more homes to support economic growth, including low cost homes to rent and buy for hard working Londoners.”
Housing Minister, Kris Hopkins said:
"The London housing market has received valuable support from foreign investment, unlocking development and leading to the building of homes that wouldn't otherwise happen.
"But it's clearly in the interests of developers to ensure that their properties are available to both UK buyers and those abroad, so I welcome today's actions by the Home Builders Federation. And the changes we've made to the tax rules make sure overseas buyers pay their fair share."
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Notes to editors
The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uList of developers signed Up;Aquinna HomesBarratt Developments plcCrest Nicholson plcFairview New HomesGalliard HomesHadley Property GroupLend LeaseLovell PartnershipsRedrow plcTaylor Wimpey plcTelford Homes plc
Click here to view the commitment in full
View report: HBF Development in London: the value of overseas investment in the building the capital’s new homes