Cash buyers are cutting out locals in London market

Lenders and brokers have expressed concerns that foreign cash buyers are squeezing London workers out of the property market.

PMS executive chairman John Malone says Londoners are finding it increasingly difficult to buy property near their workplace. He warned it is difficult to establish where the money comes from in cash purchases, so there is more risk of money laundering.

He said: “Something that has become an issue recently is the number of cash purchasers, which tells me that a lot of the purchases that are being made in London are from non-UK residents. There could be money-laundering issues because no one can define where the money has come from. It also means there are fewer and fewer properties for London workers.”

Emba group sales and marketing director Mike Fitzgerald said: “We have got five French clients, all from Paris who have bought around the Mayfair area. They have large mortgages and large deposits. The euro has got very good value. But where will the workers live in London? People are being edged out.”

Barclays director of intermediaries David Finlay said a fall in house prices and the relative strength of foreign currencies has seen a surge in interest in London properties.

He said: “I have heard about Japanese buyers viewing the London property market as down by 70 per cent on its value because of the price fall and the strength of the yen.”

Coreco director Andrew Montlake says: “A lot of the estate agencies in London have now set up their own Russian desks, with Russian-speaking staff. “I spoke to a solicitor the other day and every other client of his is Italian and they are all cash buyers. It is really noticeable in London.”