Bad news – super rich back to buying property in London!

An immediate result of the Conservatives election victory is that foreign buyers are back in the market. House prices are likely to go up and developers will plan for more luxury housing rather than meeting housing need.

A super-rich European family on Friday bought a house in central London for £65m, saying their decision was a direct result of Boris Johnson’s historic Conservative party election victory. The family instructed the luxury estate agency Beauchamp Estates to buy the property in an undisclosed “prime central London” location as investors and the very wealthy celebrated the Conservatives’ 80-seat majority. The collective wealth of the UK’s 16 billionaires increased by £2.1bn on Friday, according to the Bloomberg billionaires index, as the share prices of companies they controlled soared. Jeremy Corbyn had promised to “go after” the UK’s wealthy elite – including the petrochemicals tycoon Jim Ratcliffe and the Sports Direct owner, Mike Ashley – if the Labour party had won the election.

Gary Hersham, the founder of Beauchamp Estates, said the housebuyer had set up the deal last week, but put off signing on the dotted line until seeing the result of the election. “It is one of the most expensive properties ever sold in the UK,” he said.

He declined to state how many bedrooms the home had or provide any further details. However, as a guide to what that sort of cash can buy, a 12-bedroom home on Belgrave Square – just a few hundred metres from Buckingham Palace – is listed on Zoopla for £67.5m. Hersham said his agency, which specialises in selling expensive London properties to overseas buyers, had been inundated with calls on Friday from rich house-hunters who had been put off buying UK properties in fear of a possible Corbyn-led government.

A realistic housing policy

What would a realistic housing policy look like?

It would:
Have a realistic housing target – a maximum of 170,000 per annum for England.

Change the mix of housing to meet housing need, in other words more social rent and support for low income households seeking long term ownership.

Improve conditions for private sector tenants in terms of fair rents, security of tenure and housing conditions.

Limit and reduce the number of houses used as holiday homes and holiday lets.

Establish a fund to purchase private rented homes and transfer to local trusts.

Stop companies and individuals from using housing as a means of generating income.

But whether people can afford housing also depends on other policies – taxes, earnings and welfare.

So radical changes are needed here:
End the flexible labour market where people work in the ‘gig’ economy on zero contracts and bogus self-employment;

Create a welfare system that ensures people have the income to pay for decent housing;

Change the system so that everyone has a basic minimum income.

Housing – its not an issue of supply its a question of miserable incomes!

Dealing with issues of homelessness and housing affordability requires addressing the root causes which are partly due to government policy on spending, welfare and inadequate incomes.

… the chancellor, Sajid Javid, tries to claim that homelessness has reduced under the Tories, despite all the evidence that since the Conservatives took office in 2010, statutory homelessness has risen by 36%, fuelled by welfare cuts, the bedroom tax and cuts to wider public services. According to the National Housing Federation, more than nine in 10 homes for private rent (94%) are too expensive for people on housing benefit. Shockingly, two-thirds of these families (65%) are in work.

Party manifestos – a sustainable population policy?

The party manifestos have a blind spot when it comes to population. Which is odd as population numbers combined with per capita consumption are the drivers of resource use, energy use and greenhouse gas emissions. The higher the population the greater resource use and higher emissions will be.

As the UK population has risen then demand for housing has also increased. Yet political parties ignore this as a factor increasing demand for housing.

It also seems strange that the UK is quite happy to take skilled workers (whose training has been paid for in their own countries), thus depriving these countries of people they need and limiting their tax base, rather than spending money on training the UK workforce.

A sustainable population policy which aims for a steady state population and economy is not only desirable but inevitable if we are to prevent climate breakdown.

Labour state Our immigration system must allow us to recruit the people we need, and to welcome them and their families. Our work visa system must fill any skills or labour shortages that arise.

The Liberal Democrats state they will Stop Brexit and save EU freedom of movement.

The Green party also favour free movement.

Labour and housing – some useful ideas but flawed on the numbers front (as usual!)

Labours heart might be in the right place but again there is an assumption that its simply a case of building more!

The emphasis should be on changing the mix within a realistic housing target of say 170,000 new homes a year, not building more houses per se!

Other problems are that encouraging developers to build because they have the permissions could result in extra houses being built when they are not needed.

Introducing levies on overseas companies buying property and on second homes would still allow properties to be diverted from providing housing. Far better to ban companies and individuals from purchasing properties for such uses.

Labour will deliver a new social housebuilding programme of more than a million homes over a decade, with council housing at its heart. By the end of the Parliament we will be building at an annual rate of at least 150,000 council and social homes,…

Developers will face new ‘use it or lose it’ taxes on stalled housing developments.

We will establish a new duty on councils to plan and build these homes in their area,

We will build more low-cost homes reserved for first-time buyers in every area, including Labour’s new discount homes with prices linked to local incomes.

We will reform Help to Buy to focus it on first-time buyers on ordinary incomes. We will introduce a levy on overseas companies buying housing, while giving local people ‘first dibs’ on new homes built in their area.

We will bring in a new national levy on second homes used as holiday homes to help deal with the homelessness crisis, so that those who have done well from the housing market pay a bit more to help those with no home.

Lib Dems and housing – some good ideas but we don’t need 300,000 new houses each year!

The Lib Dem manifesto on housing sounds fine in part but like the other manifestos is flawed in terms of housing numbers. Actual evidence clearly indicates that we do not need to build 300,000 houses a year. Ian Mulheirn in one of his incisive papers estimates that household growth will equal 151,000 new households per annum and allowing for other uses of houses would result in a target of 170,000 new houses per year. [Though we would reduce the numbers of second and holiday homes thus cutting the target further.

For details see:

What we do need is to reform the system to allow for more social housing, improve conditions for private renters and allow lower income households to buy if they so wish.

And the manifesto has nothing about the problem of second homes, holiday lets and the propensity of developers to build houses (generally at the upper end of the market) and market them, so encouraging people to move to ‘nice’ areas like Cornwall.

Access to Affordable Housing

People are struggling to afford good homes in in the right location: house prices are too high and the possibility of owning a home seems remote for many people; the private rental market is expensive and insecure; and there are not enough homes for social rent to meet demand. We need to build 300,000 homes per year just to meet current demand, but are barely building half that amount. The Conservatives, looking back to the 1980s, have tried to solve the problem of unaffordable homes by extending Right to Buy, but that has only served to deplete stock and deepen the crisis in social housing. Liberal Democrats are looking to the future and will oversee a substantial building programme to ensure that everybody has a safe and secure home. We will:

Build at least 100,000 homes for social rent each year and ensure that total housebuilding increases to 300,000 each year.
Help finance the large increase in the building of social homes with investment from our £130 billion capital infrastructure budget.
Build new houses to zero-carbon standards and cut fuel bills through a ten-year programme to reduce energy consumption from all the UK’s buildings.
Devolve full control of Right to Buy to local councils.

To support people to find and keep homes of their own we will:
Help people who cannot afford a deposit by introducing a new Rent to Own model for social housing where rent payments give tenants an increasing stake in the property, owning it outright after 30 years.
Allow local authorities to increase council tax by up to 500 per cent where homes are being bought as second homes with a stamp duty surcharge on overseas residents purchasing such properties.

To reform the private rental sector, we will:
Help young people into the rental market by establishing a new Help to Rent scheme to provide government-backed tenancy deposit loans for all first-time renters under 30.
Promote longer tenancies of three years or more with an inflation-linked annual rent increase built in, to give tenants security and limit rent hikes.
Improve protections against rogue landlords through mandatory licensing.

To improve social renting, we will:
Set clearer standards for homes that are socially rented.
Require complaints to be dealt with in a timely manner.
Proactively enforce the regulations that are intended to protect social renters.
Fully recognise tenant panels so that renters have a voice in landlord governance.

Climate emergency: What the parties say

Wildfires raging in Australia and California and, earlier this year, in Siberia. Floods in Venice. ‘Biblical’ deluges of rain in northern England. October again the hottest October on record. Must be something going on. Oh right, ‘the world has, at most, about three decades to completely decarbonize before truly devastating climate horrors begin’ (David Wallace-Wells, The Uninhabitable Earth, 2019, p.214). Not that you’d necessarily be aware of the seriousness of things from this election, which is somewhat odd, as it was billed as ‘a’ or even ‘the’ climate election.

As fossil capitalism drags us ever closer, or maybe past, the tipping point, politicians struggle to keep up with the panic now gripping climate scientists. Instead, they persist with the conceit that dealing with the climate emergency is just another manifesto pledge, along with funding the NHS or getting Brexit ‘done’. Sleepwalking voters are massaged with traditional electioneering promises by the bucketful. In the meantime, most of us cling to the belief that things will go on getting progressively better while a benevolent state sorts out the climate.

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