Britain has hardly advertised their intentions to attract foreign investors priding themselves as an independent one man band. This is all the more proven with the arrival of Brexit coming over the horizon breaking Britain’s alliance with the European Union’s single market and customs union and a claim from the Conservative Party to take a tougher stance on foreign money in a bid to stamp down on asset stripping and tax avoidance.
Despite this however there has still been an income of foreign investment with current 2018 data (Deologic) suggesting a tenth of global mergers and acquisitions have involved a British firm making it the highest share for a decade. Various variables contribute to this with a largely free market in corporate control a huge advantage for investors as well as the number of high standard universities and our use of English. The drop in the strength of the pound as a result of traders selling British assets have meant takeover targets are cheaper.
The flow in money from foreign investment has also grown house prices by more than a quarter with 28% of the growth suggested to be down to overseas investment (Kings College London). The rise in foreign investment as such has reduced the rates of home ownership. Despite the majority of investments are concentrated towards London and the south-east, a ‘trickle down’ effect has seen properties even in the lowest price bracket have their values pushed up particularly in sought out Northern areas such as Manchester and Liverpool.
Particular interest has arisen from Asian investors with £3.4 billion of capital pouring in from Hong Kong and China into City offices making it a record high for the first six months of this year. As the UK is generally regarded as a safe place to invest in comparison to the instability seen in other countries, investors feel more confident in placing their finances in a market that is stable and has favourable property taxes.
The mass influx of investors flooding the country comes at a cost however. Theresa May has proposed a new law to break the secrecy among foreign investors meaning all foreign companies must be completely transparent about the ultimate owners of the properties they come to posses in the UK along with full disclosure of the source of the funds used to make the purchases. John Penrose (Conservative MP) stated that by shedding light on shell companies through a register will portray the UK as a reputable trading nation that welcomes clean investment whilst frowning upon corrupted investors.
