There’s been a long trend of residential dwellings become ‘real estate’ assets, and the effects of the housing crisis can now be starkly seen across Britain. Over ten percent of UK residents live in London, yet while housing waiting lists remain sky-high, the London ‘property market’ is a magnet to the global super-rich. Here are six key problems facing the capital:
1. Rich pickings for the global elite, speed dating for the rest of us.
The housing crisis really is everyone’s problem. London real estate represents a ‘gold standard’ for wealthy investors looking a safe return, the effect of which is that anywhere in Zone 1 is basically uninhabitable for all but those with substantially above-average earnings. Zone 2 is close to becoming an extension of that, meaning that Zone 3 is fast becoming the new ‘Zone 2’: not cheap, but vaguely affordable here and there. The market shocks just keep coming, and can be felt everywhere from regular rent hikes to increased prevalence of ‘speed dating’ viewings, in which prospective tenants must race against time for the privilege of somewhere to live.
2. Buy-to-live is becoming a thing of the past.
A decades-long running down of supply – underwritten by the mass sell-off of council housing, never to be replaced – means that more than half of London’s population are now permanently priced-out of purchasing. An ever greater number of renters are facing a shrinking number of available lets: the compound result being rents soar even further. This is having a knock-on effect outside the capital as would-be buyers head for the commuter belt.
Those in work who 25-30 years ago might have purchased somewhere are now priced out permanently, and the national average time to save up a deposit is now 22 years. More people are forced to rent while buy-to-let sales are on the rise, so rents are skyrocketing. Landlords are quids-in, especially since the vast majority of private landlord tenancies are Assured Shorthold Tenancies, many of which expire after just six months.
3. Assume makes an ass out of u and me.
Never mind waiting 22 years to scrape together a deposit for a mortgage, it’s assumed that if you can’t rent you have a strong support network, ideally including quite a bit of parental money. If you can rent, it’s assumed you face no periods of unemployment, no adversity like redundancy or relationship breakdown, and have a steady increase in earnings. This is bullshit.
4. ‘Investors’ are stacking up expensive properties… to leave them empty.
Vagueries about changing council tax bands have been half-heartedly uttered by some – including Blue Labour when it suits – however such a change would not even enter the universe of the investor class. A far more radical suggestion was reported earlier this year by VICE:
“What needs to happen is this: Once a property has been vacant for two years, then a one-off annual tax of 5 percent of its value is made. This happens each year, rising by 5 percent each time until they are paying almost 100 percent of the property’s value in tax.”
Indeed, in Central London, entire blocks of high-end condos are paid for in cash by ‘investors’ wanting a safe investment. Let alone not living in the properties, many of these ‘investors’ aren’t even career-landlords. Rather, they are part of the international super-rich, always so very fond of London for its ‘flexible labour markets’ and ‘light touch’ (non-existent) regulation.
5. Developers are in cahoots.
In addition to the whims of ‘High Net Worth Individuals’, developers such as Argent, Ballymore, CapCo, Land Securities, and Lend Lease, are helping themselves to Central and inner London and carving it up among themselves.
At Kings Cross, Argent has an exclusive development ‘open to the public’. Ballymore is turning Nine Elms and the immediate area around it into the new American embassy: a new securitized, luxury ghost town. CapCo has its own planned £8 billion, 30-hectare gentrification of Earls Court on the way. Meanwhile Land Securities has bought up much of Victoria, and Lend Lease is busy socially-cleansing Elephant and Castle having already acquired the former Heygate Estate site.
6. Landlords and government now have facing-up to do.
Since the 1980s there has been no rent control across the UK. We’re now at a stage where buy-to-let and let-to-let landlords can make rich pickings from sub-dividing boxes into ‘rooms’, knowing full well that ‘the market will decide’, and that ultimately tenants will hardly been in short supply. The situation has been made worse since the landlord subsidy known as ‘housing benefit’ has been further limited, and we approach three years since squatting in ‘residential premises’ was criminalized.
Multiple activist and tenant networks are beginning to challenge and contest the social cleansing at work, most noticeably and encouragingly, the E15 Mothers taking the Carpenters Estate in Stratford into occupation, and the regular and growing protests over ‘poor doors’ in East London: both cases of bold direct action achieving noticeable results.