Foreign cash has sent house prices through the roof. This has left a generation of young Brits with no chance of ever owning a home, according to new findings.
The study found house prices soared by a fifth more than they would have without overseas investment over the past 15 years.
Many homes bought up to earn cash for foreign investment portfolios are not even lived-in – they are simply a cash cow.
And even the cheapest homes have become more expensive because of a “trickle down” effect of the vast amount of foreign money pumped into the higher end of UK property market.
The study examined Land Registry data and estimated the average home in England and Wales would cost £174,000. This is if there had been no overseas buyers compared with about £215,000 at present.
It said cash from abroad had inflated prices mostly in London and the southeast. However, also in big cities in the north such as Manchester, Liverpool and Leeds.
Filipa Sá, of King’s College London, who conducted the study, said: “One of the factors behind house price growth in countries such as the UK, Australia and Canada is demand from foreign investors.
“This study looks at data for the UK and argues that foreign investment had a significant and positive effect on house price growth in the last 15 years.
“Foreign investment is also found to reduce the rate of home-ownership.”
Foreign buyers now own close to 10 per cent of the UK’s housing stock and campaigners warn overseas ownership could soon match foreign ownership of UK shares – more than 50 per cent – unless action is taken.
The majority of office space in the City of London is already owned by foreign investment firms.