Locals and UK-based homebuyers will be given “first dibs” on new-build homes in London under plans announced by Sadiq Khan.
The Mayor of London said new-build homes priced at up to £350,000 will be offered for sale exclusively to Londoners and UK-based buyers for the first three months when they arrive on the market.
People living and working in London will be given priority for the first month of that three-month period.
The initiative is expected to start at some point during the summer, the Mayor’s office told This is Money and MailOnline.
Members of the Home Builders Federation, the g15, which represents London’s largest housing associations, and Berkeley Homes – the capital’s biggest housebuilder – have offered to restrict sales for three months before they are marketed overseas.
Last year, Khan’s office commissioned research that found half of new properties bought by overseas buyers in London were homes under £500,000.
Housing experts welcomed the new initiative. Dr Alla Koblyakova, expert in property finance and investment at Nottingham Trent University, said: “Studies have shown that supply of new housing alone isn’t enough to help people get on the property market. In London, where prices are high, demand is significant enough that prices are relatively inelastic to greater supply.”
Koblyakova suggested the three-month period on the restriction of sales makes sense from a market perspective, adding: “Three months is nothing when considering whether the move could adversely affect the wider property market. Research has shown such measures have to be in place for at least a year before they have any impact in that regard.”
However, Simon Tollit, director of London estate agency Tedworth Property, described the move as a “headline-grabbing gesture”.
“There are so few properties available for sale in new developments in London that will qualify, one must wonder whether it will make any meaningful difference whatsoever,” he said.