Now foreigners buy up the North
They nab 94% of new block in Manchester
WITH 282 flats, Manchester’s ‘landmark’ tower was supposed to help locals taking their first step onto the housing ladder.
But with all but 11 of the flats sold, 93.9 per cent of buyers at the 29-storey One Cambridge Street development are from overseas.
In an extraordinary United Nations of ownership, they come from 18 countries including Slovenia, Zimbabwe, Bahrain and Malaysia.
And while some are rented out, many are thought to be lying empty as investments that buyers hope will enable them to cash in on the UK property market.
Critics say the block is just one dramatic example of how foreigners are increasingly pricing locals out of the property market, a trend which they warn will eventually turn Britain into ‘a nation of tenants’. While sought-after London property has long been snapped up by overseas buyers, experts say the pattern is increasingly spreading to other cities, with Britain’s impending exit from the EU appearing to do little to slow demand.
Now campaigners are calling on ministers to place restrictions on foreign investors buying UK property, following the example of countries including Australia, Italy and Singapore.
When plans were first submitted for One Cambridge Street in 2014, its developers claimed it would appeal to ‘those looking to make the step towards getting on to the housing ladder and more established owner-occupiers’, as well as investors.
The building, on a former industrial site on the southern side of Manchester city centre, is now almost fully sold – but just two flats were bought by British owner-occupiers, according to official documents.
Out of 282 apartments, worth an average of £235,000, just 17 have British owners, with 47 sold to buyers in Hong Kong and 26 to investors from the UAE, according to research by The Times.
Other nationalities include Singapore (17 flats), South Africa (eight), Malaysia ( five) and Thailand (three), while 125 were sold to a secretive company based in the British Virgin Islands.
Developers CS Developments Limited insisted occupancy rates were ‘ very healthy indeed’ but stressed that it had no control over where its buyers come from.
Research in 2014 found that 51 per cent of prime Central London property had been sold to overseas buyers over the past 12 months, ris- ing to 80 per cent for prime newbuild properties in the capital.
But demand has spread beyond London. Reacting to the capital’s unaffordable prices – and seeking property with a healthy rental ‘yield’ – many investors are now targeting cities such as Manchester, Birmingham, Newcastle and Liverpool.
The influx has given Manchester the fastest-rising property prices at almost ten per cent over the past year – but seen rates of owner-occupiers plunging from 72.4 per cent in 2003 to 57.9 per cent today.
Cambridge, Slough and Brighton are among the smaller British towns and cities that are also being targeted by foreign property investors, with many attracted not only by the capital appreciation but also relatively low taxes in the UK.
In booming Hong Kong and Singapore, for example, foreigners have to pay 15 per cent tax on residential property purchases, compared to an average 0.9 per cent stamp duty levied to foreign buyers on the flats in Manchester. Dan Craw, of campaign group Generation Rent, said: ‘The tax system should penalise owners of empty homes in high demand areas.’
In a report entitled ‘ Solving the UK Housing Crisis’, David Valentine of Conservative think tank the Bow Group warned: ‘The future for British people who are not already on the housing market is grim and getting worse as British housing increasingly becomes the preferred global haven for wealthy foreigners to invest their money.’