At the high end, the money didn't go anywhere, except possibly offshore. A lot of London real estate was being built explicitly as an investment, and the offshore investors - who are now being cleaned out - handed over their money to developer/speculator companies, who were also offshore and/or foreign owned.

So no - this real estate is not local. It happens to have a physical location, but when you understand how the money associated with it does it best to avoid spreading out into the surroundings, it might as well be built on an uninhabited atoll in the Pacific.

At the low end in London the money went to landlords who bought large portfolios with the financial assistance of buy-to-let loans and tax breaks.

The tax breaks are being removed, and interest rates are drifting upwards. This is killing casual landlords, but isn't a problem for the sharks and the rabbit hutch 10-gig-economy-workers-in-a-room slumlords.

I'd venture to say this should get more attention than it does. Real estate was local. Glass-steagal (sp?) changed who is valuing the property and from where. Putting pressure on home values based on skewed national or international perspectives that are completely non-local.