LONDON (Reuters) - Housebuilders have agreed to offer Britons new homes in London at the same time as people from outside the country, ending an occasional practice of first marketing them abroad which has worsened the capital’s housing shortage.
London housing is being snapped up by Russian oligarchs, Indian tycoons and Europeans fleeing the euro zone crisis, helping fuel a rise in property prices and making it tough for local people to buy a first home.
Eleven of the capital’s housebuilders, including Taylor Wimpey and Barratt Developments, said on Wednesday they had signed a commitment to sell homes in new developments in Britain before or at the same time as trying to sell them outside the country.
Housebuilders typically sell a percentage of new homes before they start building them to help finance the development.
The Home Builders Federation, the industry group which announced the commitment, said 11 percent of new homes sold last year were marketed outside Britain before being offered within the country.
“London has an acute housing crisis,” HBF’s chairman Stewart Baseley said in a statement. “The industry wants to ensure that UK buyers have every possible opportunity to buy the homes being built.”
Britain said earlier in December it would impose a capital gains tax on foreign property investors from 2015 in an attempt to allay fears that wealthy foreign buyers are inflating a London-led property bubble.
Housebuilding in Britain is at its lowest in about 90 years and economists say the country needs 250,000 homes a year to keep up with population growth, with demand far exceeding supply. The problem is particularly acute in London.
Foreign investors have bought about 70 percent of newly built properties across central London, according to Savills, helping fuel a 10 percent rise in the price of London homes over the last twelve months.
Reporting by Sarah Young; editing by Tom Pfeiffer