It\u2019s not the foreignness of global capital flowing into the capital\u2019s property market that is the problem but the uses to which it\u2019s being put<\/p>\n
It\u2019s become received wisdom that wealthy foreigners are to blame for the unaffordability of homes in London<\/a>. You know how the story goes: they buy everything in sight, pricing everyone else out; they don\u2019t buy flats because they want to live in them, they \u201cbuy to leave\u201d and sell for a vast profit at some future date; to these oligarchs and super-rich such properties aren\u2019t homes, but blocks of bullion or \u201csafe deposit boxes\u201d where they can stash their spare millions and watch them grow.<\/p>\n There\u2019s something a bit too neat about all this. For a start, while money from overseas funds the bulk of new residential properties in \u201cprime\u201d central London and a couple of other expensive spots, only a few percent of homes bought in Greater London as a whole are purchased by foreigners. There\u2019s also something discordant about the stress on the foreignness of those \u201crich foreign investors\u201d whom 49% of Londoners deemed the biggest reason for the capital\u2019s soaring house prices when polled last April<\/a>. Would rich investors in London be alright if they weren\u2019t foreign? Are foreign investors alright if they live in London, as many do? Are we not a \u201cworld city\u201d, suddenly?<\/p>\n On Wednesday<\/a>, the London Assembly\u2019s housing committee<\/a> explored the foreign investor theme with the help of guests, who included Peter Wynne Rees. Until a year ago, when he entered academia at UCL<\/a>, Rees was the City\u2019s transformative planning officer<\/a>. If you don\u2019t like the Gherkin and all that<\/a>, blame him. He lives on the 27th floor of The Heron<\/a> – the first large residential building put up in the City since the Barbican – and has been trying to get a residents\u2019 association going. He has discovered that many of the tower\u2019s residents exist more in theory than in practice: \u201c25% of the owners haven\u2019t collected their keys even after 12 months. A lot of the other flats are lived in by student offspring, even more are visited for a few weeks a year. Russians who buy flats in London tend to use them for vacations and leave them empty for the rest of the time.\u201d<\/p>\n Rees, as he reminded everyone, coined the \u201csafe deposit box\u201d metaphor. He described the main thrust of the Nine Elms\/Battersea regeneration as off-plan selling in the Far East, with buyers picking out non-existent properties on the strength of CGIs showing views of London landmarks they recognise. Yet he made plain he\u2019s not opposed to overseas investment per se<\/em> – after all the Square Mile skyline across the Thames from City Hall that he helped to create was funded in that way.<\/p>\n The thing about those offices, he said, is that they\u2019re fully occupied. By contrast, too many of the high-rise residential buildings going up in the centre are not. This was a poor use of precious land. All that footloose big loot from China, Singapore, Malaysia, Russia and Greece needs to be channeled into things London requires, socially and economically: \u201cWe need to be building more homes that are actually utilised, and more offices. We need a professional private rented sector.\u201d Rees cited lifeless prestige enclaves like Chelsea Harbour as examples of what we\u2019re getting instead, and blamed a loss of belief in the power of planning: \u201cIt seems to have gone out of fashion\u201d. In the Guardian, Rees has accused the government<\/a> of destroying the tools of the planning trade.<\/p>\n Other guests painted a less alarming \u201cbuy to leave\u201d picture. Katy Warrick and Jim Ward from Savills<\/a> and Ian Fletcher from the British Property Federation<\/a> said research indicated that the vast majority of overseas investors wanted to rent out the properties they\u2019d bought. Unlike in the Heron, only a small percentage were kept as holiday homes or student pads for children and very few indeed were simply left, as it were, unwrapped. But all agreed that solid data on all this was hard to find, as was defining what makes an investment foreign. Boris Johnson boasts of his \u201cconcordat\u201d with developers to market in the UK first. Warrick said this had had an effect, but that it didn\u2019t follow that a UK-based sale is made by a British person.<\/p>\n The standard defence of the status quo is Johnson\u2019s \u201csomething-or-nothing\u201d argument. Criticised for the low yield of \u201caffordable\u201d homes extracted from developers of some of London\u2019s largest pieces of available land, he argues that without upfront investment from overseas, none of these regeneration projects would get off the ground and therefore no \u201caffordable\u201d would be generated on those sites all. The problem, though, is that he\u2019s a soft touch. His successor must be both tougher on preventing prime site developments that do London little good and more determined to find ways to make up for any resulting loss of little of value to the city that they do produce . We have too much need and little space for so much waste.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" It\u2019s not the foreignness of global capital flowing into the capital\u2019s property market that is the problem but the uses to which it\u2019s being put It\u2019s become received wisdom that wealthy foreigners are to blame for the unaffordability of homes in London. You know how the story goes: they buy everything in sight, pricing everyone […]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-1166","post","type-post","status-publish","format-standard","hentry","category-news","category-uncategorized"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9PjAq-iO","_links":{"self":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/1166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/comments?post=1166"}],"version-history":[{"count":0,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/1166\/revisions"}],"wp:attachment":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/media?parent=1166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/categories?post=1166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/tags?post=1166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}