Boris Johnson has called on property developers not to market new homes overseas before they go on sale in London.
Concerns have been expressed in recent months that the practice of marketing homes to overseas buyers first is leading to Londoners being priced out of home ownership.
The Mayor, who is attending the international property forum at MIPIM in Cannes, wants developers to guarantee properties will be marketed to Londoners before, or at the same time, as they’re offered to overseas buyers.
He’s also calling on investors and developers to double the number of homes being built and to boost the number of affordable homes available.
In letter to “key developers”, the Mayor says: “I do not in any way want to deter international investment – you can see astonishing transformation in London thanks to international investment – and I recognise the important economic contributions migrants make to our city.
“You will understand however, I want Londoners to be able to live near where they work and to raise their families in our boroughs. Doubling house building must be of benefit to everyone in our city who contributes to our economy. “
His letter goes on to say: “I am therefore writing to ask you to sign up to my new Mayoral Concordat to promote home ownership for Londoners. This voluntary pledge recognises your commitment to market new homes first or first equal to Londoners. I hope your company can join other respected developers in giving this commitment. “
The concordat has been backed by Baroness Jo Valentine, chief executive of London First, which represents many of the capital’s biggest developers.
She said: “Overseas buyers are an important part of the London property market – many purchase off-plans, playing a critical role in helping house builder’s funds the early stages of development.
“But there needs to be a level playing field and people in the UK should not be prevented from accessing property that comes onto the market. We also have to recognise that many of our members already give UK buyers the same chance to buy as anyone else, which is why they have so readily put their names to the concordat.”
Stewart Baseley, Executive Chairman of the House Builders Federation, said although members were committed to ensuring Londoners “have every possible opportunity” to buy homes, “attracting up-front investment by pre-selling homes is absolutely key, and without it many developments would not go ahead.”
He added: “Selling some properties abroad allows tens of thousands of affordable homes as well as for rent and to buy, to be built for Londoners.”
London Assembly Member Darren Johnson claimed the Mayor’s proposal “will make little difference”.
He said: “The Mayor can’t have it both ways. He is encouraging investors to speculate on London’s land and homes, driving up prices. He isn’t even ensuring they are marketed here first. If luxury flats go for sale in London and Hong Kong on the same day, it’s going to make very little difference to the average Londoner.
“These are often ‘off plan’, targeted at rich investors who have the cash in hand and are able to speculate on expensive flats that will be completed in two years’ time. It’s pretty much impossible for your average Londoner to get a mortgage for something that far away, and once they see the prices they won’t even bother trying. As Baroness Valentine has made clear, this pledge will make little difference and so is effectively meaningless.”