Is London’s luxury properties aimed at rich foreign investors?
Although London is facing housing crisis as a result of successive governments failing to build affordable council homes, with knock-on effect for the rest of the UK. Despite these desperate shortages of housing, hundred of thousands of affordable homes are demolished to make way of luxury apartments aimed at foreign investors. The market solutions are responding to the needs of global capital, rather than needs of ordinary Londoner. Anna Milton illustrates how we got into this mess and how we can get out of it.
At the start 1996, the average home for a first-time buyer in London cost 2.6 times the median salary; in contrast at the end of last year it was more than 10 times, and more than 30 in the wealthy borough of Kensington and Chelsea.
She illustrates the London property prices no longer bears any relation to wages.
In Big Capital, Journalist and academic Anna Minton clarifies and give us a convincing account of why the property market is broken and who is to blame.
She blames the culprits on Russian oligarchs, overseas investors, house builders, estate agents. She also lift the lid on the lengths to which luxury developers will go to get their project approved. She even speaks to a man from Brighton who was paid to attend a planning meeting and make positive noises about new block of flats.
She also explains about a middle class mother of two who, unable to rent on a bigger flat, has been considering occupying an alcove in the hallway and putting mattress in it, so that her seven-year-old daughter do not have share a room with her brother – this is Dickensian.
She also highlights the “Kleptocracy Tour” take us from Westminster to Highgate, showing house owned by the wife of a Russian minister, the son of a deposed African leader, and Ukrainian oligarch who was arrested in 2013 on suspicion of corruption and forming organised crime.
She describes high prices trickling down through the London billionaires displace multi-millionaires who displace the millionaires and who in turn displace rest of us. At the bottom of the ladder people living in housing estates find themselves evicted. The cycle begins again when their homes are knocked down and replaced by luxury apartments. The planning system that has allowed to inflate underlying land costs as it has been shambled by MP, and the cornering of house building by a few big companies, which limits the new supply and Margaret Thatcher’s Right to Buy scheme, which sold off large amount of council houses and flats and that is how chicken got so expensive.
The more housing is treated as financial asset, the more likely it is that those without assets will lose out. She questions if London is for the international super rich and institutional investor or the ordinary working Londoner?
The British are obsessed with house prices and any attempt by policymakers to reduce them would be committing political suicide.
A report named “the bank of Mum and Dad” as the unofficial ninth biggest mortgage lender in the country, funding two-thirds of all property purchases for the under 35s. This book is a must for all although makes a painful but compelling reading.
Big Capital: Who Is London For? By Anna Minton Penguin £9.99, 178 pages