The United States to the Rescue… Again!
Most of what I’ve been reading about London in recent years has been bad news: rising crime, falling property values, and stories about political corruption and social discord.
But just this week, a bit of good news: According to Beauchamp Estates, a luxury real estate agent based in London, and reported on in the WSJ, 25% of high-end home sales in London were made to Americans.
The attraction for Americans – wealthy Americans – is the steadily lowering property prices in the city, particularly for luxury residences in the most coveted neighborhoods. And that is the result of a slew of tax-the-rich policies that the city’s liberals began implementing in 2023.
The policies shockingly led to what they have always led to in cities throughout the developed world: the flight of the wealthiest residents from their beautiful homes to homes outside of the city’s tax jurisdiction, where the cost of home ownership – including the asset itself, the property tax, and the maintenance costs – are less onerous. And that has led to a glut of multimillion-pound houses on the London market today.
This isn’t the first time this has happened in London.
In past decades, the buy-side of the housing market has been dominated by a constant supply of international buyers who see London for what it has always been: one of the best cities in the world to make money and preserve wealth. And for as long as I can remember, a sizeable portion of those international buyers were Arabs from Saudi Arabia, Qatar, and the UAE. Though the Arabs’ share of the buying has been dropping since the growth of the city’s Arab population, as a whole, has started to come predominantly from the poorer Arab countries, such as Somalia, Syria, Yemen, and Pakistan, the overall changes in terms of racial, ethnic, and cultural diversity have been enormous. Today, a gobsmacking 41% of London’s population is comprised of people born overseas.
For reasons I can only guess at, these demographic changes haven’t worried wealthy American buyers as much as they’ve worried “native” Londoners.
Just the Facts
* In 1980, London’s population was 6.7 million. In 1980, it was just a bit more. In 2000, it was 7.3 million. In 2010, it was 8 million. And today, it is 9.9 million.
* 41% of London’s population is now comprised of people born overseas. Of these, approximately one-third were born within European Union countries, while the other two-thirds were born outside of the European Union.
* Most of the London residents born outside of the UK were born in India.
* About 20% of London residents consider themselves to be Christian; 20% consider themselves to be non-religious; 16% consider themselves to the Muslim; and the other 44% do not specify any religious affiliation.
