‘One in ten’ new-build homes bought by overseas investors in UK is being left empty

  • Practice widespread in London where thousands of apartment blocks are built
  • But agents suggest it may also be occurring to a lesser extent across the UK 
  •  Investors buy the properties with the aim of selling them on in pristine condition to another investor for a higher amount of money in two or three years’ time

One in ten new-build homes bought by overseas investors is being left them empty, it has been suggested by a leading property buyer.

The practice is believed to be particularly widespread in London where thousands of new apartment blocks are being built, according to buying agent Henry Pryor, but agents suggest it may also be happening in locations across the UK.

All ten of the Shard’s £50 million luxury apartments in London are reportedly empty

Investors buy the properties with no intention of offering them onto the rental market to obtain a rental income. Instead, they opt to keep them empty with the aim of selling them on in pristine condition for a higher amount of money in two or three years’ time.

The idea of buying a property and leaving it empty will seem bizarre to many people, but the buying agent said that to overseas investors with deep pockets it can make sense as a place to park their cash and try to turn a profit.

This is because investors may be happy to buy London property as a safe haven rather than to earn an income and believe it should rise in value over time.

Pryor told MailOnline: ‘I suspect that around ten per cent of newly built homes bought by overseas buyers are ‘shrink-wrapped’ and left empty.

‘The practice makes sense to say the Chinese who will pay more for an unlived in property just as many Brits will pay a premium for a new car. The reality is that only the exceptionally rich or the spectacularly stupid would deliberately do this.’

The claim follows suggestions that all ten of the Shard’s £50million luxury apartments have stood empty for five years.

The luxury homes in the skyscraper were unveiled in 2012 and come with large open-plan living areas and bedrooms, and even cinema rooms.

Research earlier this year found that more than 200,000 homes lie empty, with 20,000 being in London alone.

The findings by Property Partner analysed latest from the Department of Communities and Local Government, based on council tax data.

Investors have been attracted to London, due to the high house prices in recent years.

The average value of a property in the capital has risen almost £200,000 in the past five years to £613,457, according to property website Zoopla.

And while the practice of leaving homes empty is more common in the international high demand areas of London, it is also happening around the UK suggest agents.

Alex Gosling, chief executive of estate agents HouseSimple.com, said: ‘The number of registered empty homes could be the tip of the iceberg.

‘In London, in particular, a lot of foreign investors have bought properties with no intention of renting them out.

‘They are happy to leave them empty and pay the council tax, because the capital growth far outweighs the monthly costs.

‘The property is registered as occupied, but actually it’s essentially a long-term vacant property.

‘We assume that London is the only place where this is happening on a large scale, but this could well be happening in other cities around the UK – and not just by foreign investors.’

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