FOREIGN students and businessmen have swamped the London lettings market leaving British residents unable to find homes.
The change in exchange rates and the rocketing number of international students have combined to leave a shortage of homes to rent in the capital.
According to lettings experts, it has become almost impossible for British people to get into the rental market.
“There’s just this constant influx into the market, and at the same time no one is leaving,” said Marc Von Grunherr, from Benham and Reeves Residential Lettings. “There’s no exodus of people leaving to help people get a place.
“It is far too expensive for anyone to get a foot on the market in London at the moment, even the schemes that the government has in place don’t help.
“Even if they have the sizeable amounts of money you would need there just isn’t the space for anyone to move in.
“Investors want to make a profit, they don’t care about getting people in, and the foreign investors want a place to live.
“I’d be absolutely amazed if even ten per cent of the properties we rented out in the last year went to British people.”
Mr Von Grunherr says the government needs to do more but he doesn’t know what they can do. “It’s a tricky situation,” he said. “If they start restricting what people can sell and to whom you just scare people away and that’s exactly what we don’t need.
“Once upon a time hospitals used to have properties they owned and rented out to nurses, but now they make more money selling off the property. There just aren’t spaces for British people to get into the market any more.”
According to Anita Mehra, Managing Director of the firm, the London market has become incredibly attractive to foreigners.
“Property remains very attractive to overseas investors because of the exchange rate, which makes many homes effectively 20 per cent cheaper now than in 2006” says Anita, who has just returned from several property exhibitions in Hong Kong, Singapore and Kuala Lumpur.
“Also there are growing numbers of international students in London – there are now 285,000, some 25 per cent more than just two years ago.
“Academic experts say there will be a predicted 47,000 student-bed shortfall by 2016 as the number of incomers grows well beyond the construction of purpose-built accommodation.”
According to Anita these factors combined with falling levels of new house-building and continued mortgage restrictions, especially for first time and young professional buyers, mean the demand for London homes – to buy and to rent – will outstrip supply for many years to come.
The growth of the finance sector in London is also expected to bring in yet more foreign residents to London, adding even more strain to the market.