Nowadays, many real estate buyers in the United Kingdom are from overseas, and constitute about a third of total buyers. According to campaigners conclusions, with the high demand for houses mountingconstantly, this has a knock-on influence on prices all throughUK.
As stated in a report in December 2012 whichwasdrawn up for Boris Johnson, the Mayor of London, the issue is all the morecritical in prime London areas, where around 75% of property investors are not from within the country.
Most of these properties have been sold even before they are built (off-plan). This prearrangementis more accustomed to foreign investors than to the buyers in London, where prospectiveinvestorsare generally expected to look for a property before they put in an exact offer.
London is at the sharp verge of this as this set of circumstances is misrepresenting the whole marketplace and does not meet the housing requirements of Londoners, although the house price growthaffects the whole country. It indicates why Londonershave to driveout for more reasonablehousing targets.
Countries like Singapore,Australia and Switzerland have already takensteps to address foreign investors by proposing property speculation taxes. By the same token, the UKproposesthat with the exemption of sellers, owner-occupiers and sellers includingcommercial investors willpossibly face a tax on property resale. Whether they are UK taxpayers or not, this tariff may well apply to every seller.
There has been an argument between the authors that this may perhapsdampen price escalation by disheartening speculation. Although, they also acknowledge that this kind of tax might have the inadvertent consequence of plummeting the existingfunding for social housing assignments.
The report states that suggesting a Property Speculation Tax (PST) will be a well-timed means of backup to change the comportment of buyers. It would not sort out the housing blow but it may perhaps help lessen market unsteadiness and limit the untenable upswing in property prices across London and the South East.