It’s no longer just London: now Britain is encircled by the property sharks
single generation transformed London into a capital where no person with normal resources could hope to own a modest home. It transformed London into a city where young people couldn’t start their careers, unless they had parents who could help them out. It transformed London into a place where every flat was in a block of “luxury apartments”, its price arranged in some weird dimension that had absolutely no connection to the wages paid at the coffee shop on the ground floor.
Everyone knew what the problem was. Property prices had exploded, fuelled by international wealth. The government was reluctant to halt the bonanza. It made people who already owned property in London feel rich, confident and willing to keep on spending. The party continued.
Exploding property prices meant property became an even more attractive investment, the best investment of all. You could buy a property, let it, and have a healthy income as well as a huge capital gain. Or not even bother to let it. What were, to some, crazily unaffordable rents were, to others, mere peanuts, not worth the smallest amount of hassle.
A friend who did a private residential security job for a while once asked a cleaner how often her employer visited the flat she kept ready for him. She said he’d never been. She’d started out cleaning thoroughly every week, using all the equipment and products she’d been supplied with. Now, she used just one dry cloth, for the dust. This, in a city where 8,000 people sleep rough each year and 85,000 children spent last Christmas in temporary accommodation. In that particular development, Nine Elms in south London, a deal was done that wrote off much of the obligation to build affordable homes in favour of an extended tube line. Maybe the woman’s employer will turn up when that’s completed. Or maybe not.
There was one consolation, a crumb of hope, as visceral fat settled around the organs of London, giving an impression of robust good health even as it squeezed the life out of the place. Maybe now Britain’s other great cities would attract more of the infrastructural investment and hungry talent that London tended to monopolise. Maybe the capital’s loss would be other cities’ gain. There was reason to believe this. Londoners are moving to other cities in droves. Some seem quite pleased about it.
Except that the curse of property speculation is moving with them. An investigation by the Times has found that “foreign investors are buying up chunks of new housing across Britain, making it even harder for young people to purchase their first home”. It found “93% of flats in one of Manchester’s biggest housing developments have been bought by foreign residents or companies registered overseas. Only 17 of the 282 flats were bought by British residents and only two are being lived in by UK owners.”
The weakness of the pound in recent months has made UK property all the more attractive to foreign investors, who don’t see the shortage of residential property in Britain being addressed too soon, the report suggested. Well, of course it won’t, not if properties are being bought up as fast as they can be built, by people who have no intention of living in them. To protect their investments, all the overseas investors have to do is keep on buying. Of foreign buyers, there are limitless supplies. We’re not even talking about the international super-rich any more. In China, the middle classes see an investment in British property as a very good place to park their dosh, better than any other. So do Singaporeans, even though foreigners are banned from buying property in their own country.
In 2015 a conservative thinktank, the Bow Group, warned that unless things changed, Britain could build new homes for ever without making a dent in the shortage of homes for residents, because this investment buying would just keep on happening.
No EU regulation ever stopped Britain from tightening its rules on inward investment in property, even though member countries mostly are as laid-back about the matter as Britain is. Poland is one exception. There, you have to prove a link to Poland to buy a home, unless you’re part of the EU or European Economic Area. In Switzerland, Denmark and Australia, restrictions of various sorts are in place. Switzerland’s are fairly draconian. For example, non-residents can only buy one property for family use and the floor space can’t be more than 200 sq m. In Iceland, only residents can buy homes.
Britain, particularly beleaguered by the vicious, strangulating cycle of endless property investment, seems to be mesmerised by the continued, repulsive bloating of house prices – as it has been for 20 years. This is no longer a problem only for Londoners. It’s distorting the lives of all of our citizens and all of our cities.
Source: The Guardian
Author: Deborah Orr