This week’s letter comes from Derek Compton from Kingston Financial Services in response to the article: Should the UK ban overseas buyers from the property market? – Marketwatch.
First of all, he clarified that visitors are not necessarily buying properties.
He said: “Businesses and business people can still invest in the UK, but if they do not live permanently in the country they can always rent or book hotels for the short stays they need. In many cases, the properties being purchased are being used very little, if at all and are instead used as means of quickly increasing capital through equity increase.
“Shaun Church suggests to hit the UK landlord even more than the government already has, by taxing periods when their properties are vacant. However, UK landlords have already been massively hit by the new tax calculations on BTLs, by the additional stamp duty and by council tax when the properties are empty between tenants.
“There is no point in penalizing landlords until they sell all their properties, because many people cannot afford to buy and with councils not really developing properties for rental there is an essential need for private landlords. Is there an essential need for a business person from a foreign country to have three properties in this country, possibly sitting empty?
“I would agree with Martijn van der Heijden that ‘the UK doesn’t have this wall of money problem’. What it does have though is an inability to build enough houses to meet demand for UK residents. It is not just large London properties that oversees investors are buying up, their purchases are affecting housing across a wide range of prices and areas.
“Unfortunately, builders only seem to want to build on the edge of existing towns therefore their new properties are close to the countryside. Very few want to take up the brown sites in towns and cities and when they do, they are often held back by red tape, planning and preservation regulations that can stop the development being cost effective. We need more flexibility for building in those areas, or grants for builders to help cover the extra costs of preserving historic features.”