London Housing: A Global Asset Class Locals Can’t Afford
London remains the UK’s least affordable housing market, even after a period of slower price growth and slightly better mortgage conditions in 2025. Nationwide’s latest affordability data still puts the capital at the bottom of the UK rankings for first‑time buyers, while Bloomberg reports that in about 90% of London local authorities, average house prices are more than 12 times local annual earnings. Parallel assessments of affordability across UK cities give London a score barely above 3 out of 10, making it by some distance the most unaffordable major city in the country.
For many Londoners, homeownership is now a distant prospect rather than a life-stage goal, and even the private rental market is slipping out of reach. The question is not whether London is expensive — it is who can still afford to buy, and whose capital is shaping the market.
How Far Are Locals Priced Out?
Affordability metrics tell a consistent story. Trust for London, an independent foundation, describes the housing crisis as “the defining issue” for the city, noting that more than 300,000 households are on the social‑housing waiting list and that Londoners increasingly rely on an expensive, shrinking private rental sector. From 2021 to 2023, around 45,000 rental properties were sold with no comparable replacement stock, reducing the number of homes available to rent, particularly in the most affordable areas.
On the demand side, a community analysis in 2025 highlighted that renters are being “priced out” as average tenants spend more than 40% of their income on rent, well above the level commonly seen as sustainable. The London Assembly has been told that rising housing and living costs are contributing to families leaving the capital, with a 20% decline in births between 2012 and 2023, especially in inner London. These pressures sit alongside data showing that, despite marginal improvements, London is still the UK region where it is hardest for first‑time buyers to assemble deposits and service mortgages.
The supply response has lagged. A BBC review this year showed that London is on track to miss its revised affordable‑homes target, with fewer than 8,000 homes started under the current affordable programme by the end of 2025, against a reduced goal of about 17,800–19,000 by March 2026. That shortfall leaves local incomes chasing a limited pool of genuinely affordable homes.
Who Owns London? Offshore Companies and International Buyers
Against this backdrop, London’s role as a global safe-haven asset class is well established. Two different data sources point to the scale and opacity of offshore and overseas ownership.
First, research by Tax Policy Associates estimates that nearly 100,000 properties in England and Wales worth roughly £460 billion are owned by offshore companies, with London disproportionately represented. In about 44% of these cases — representing approximately £190 billion in property — the real human beneficial owner is hidden despite legal requirements to disclose them. A BBC investigation into the government’s new Register of Overseas Entities found that around 18,000 offshore firms, collectively holding more than 50,000 properties, either did not comply with disclosure rules or filed information that still makes it impossible to identify the individuals behind them. This non‑compliance includes a Cyprus‑based company that owns a £90 million west London home linked to former Chelsea owner Roman Abramovich.
Second, data on international buyers show how deeply foreign capital is embedded in key segments of the London market. Hamptons reports that in prime central London, the share of homes purchased by international buyers rose from 39% in 2022 to 45% in 2023, returning to pre‑Covid levels. Bloomberg and other analyses note that London has the highest proportion of overseas homeownership in England, with about 33.9% of internationally owned homes located in the capital. More granular figures from Hamptons show Asian buyers increasing their share of foreign transactions in prime areas from 9% to 13% in 2023, with Chinese, Hong Kong and Indian buyers all active, helped in part by more generous visa routes for Hong Kong residents.
Beyond the prime postcodes, international purchasers made up 27% of London sales in the first quarter of 2024, up from 24% a year earlier, significantly higher than the 0.33% share of overseas buyers across England and Wales as a whole. In southern England more broadly, foreign buyers accounted for 17% of purchases, reinforcing the capital’s profile as the focal point for overseas demand.
Transparency Pushback and the Offshore Retreat — or Rebrand?
Pressure on opaque ownership structures has increased since Russia’s full‑scale invasion of Ukraine and the UK government’s 2022 move to force offshore property owners to disclose beneficial owners. A 2025 paper by the EU Tax Observatory examining this reform found that new property purchases by companies registered in tax havens fell relative to those using non‑haven jurisdictions, suggesting that greater transparency has raised the cost of using offshore companies for property acquisitions.
Yet the same body of work by Transparency International UK and investigative journalists underscores how partial that shift has been. Their “Through the Keyhole” report identifies almost 52,000 properties across England and Wales still owned anonymously despite the new law — more than half of all assets held by offshore firms that should have declared their owners. The BBC’s analysis of the register likewise concludes that tens of thousands of properties remain effectively shielded from public scrutiny because filings are incomplete, misleading or structured through chains of opaque entities.
In practice, London is no longer simply “owned by offshore money" but by a mix of disclosed international buyers, onshore vehicles and a still‑large stock of offshore companies whose ultimate owners remain hard to trace.
Implications for Londoners — and for the capital
For local residents, the combination of high prices, constrained affordable supply and persistent international demand translates into exclusion, instability and greater reliance on an overstretched rental sector. Analysis by housing charity Trust for London warns that the housing crisis is driving homelessness, with more households in temporary accommodation and an increasing share of incomes flowing to landlords rather than into savings or local consumption. Separate projections suggest that as many as 1.2 million households could face being priced out of London altogether by 2035 if affordability trends continue.
For investors, the picture is more complicated. On one hand, London’s status as a global store of wealth, underpinned by rule of law and deep markets, remains a core part of the investment case; industry voices stress that international owners “continue to play an important role” and that overall levels of overseas ownership have remained stable despite political and tax uncertainty. On the other, policy risk is rising: missed affordable‑housing targets, visible local displacement and sustained investigative work on offshore opacity create pressure for tougher taxation, ownership disclosure and potential restrictions on non‑resident purchases.
The unresolved tension is straightforward. London’s real estate system has been built around a model in which property functions simultaneously as a home for residents, an income stream for landlords and a balance‑sheet asset for global capital. The data show that the last two roles have been much easier to fulfil than the first. The trajectory of reforms on transparency, foreign ownership and affordable housing will determine whether that imbalance narrows — or becomes a defining feature of London’s economy for another generation.