Like crime in a multi-storey car park, London Mayor Boris Johnson’s analysis of what is wrong with London’s housing market is, as the award-winning joke has it, wrong on so many levels. Foreign investors, mainly from the Far East, are currently buying around 70 per cent of all newly-built homes in inner London, for record prices. Boris’s exoneration of them of all blame for the massive increases in the prices of those homes is a bit like failing to relate guns with gun-related crime.
He talks of “the anger of professional people who cannot live in districts where their parents grew up, and who cannot see how their kids will ever be able to afford to buy in London”. But instead of addressing this crisis he actually celebrates it. “London is now globally recognised as such a desirable city that its property is treated effectively as another asset class,” the Mayor wrote this week. “A safe investment in a turbulent world”. And yes, this has “buoyed property values”, but hey, that’s a small price to pay for London’s standing in the world. And besides, “we can build hundreds of thousands of homes for rent, for affordable rent, for market sale and for part-buy-part-rent”.
Oh, we can, can we? Well in that case, Mr Mayor, why have we not done so yet? And why would anyone build affordable homes for Londoners when they can make so much more money building over-priced ones for citizens of distant shores?
I haven’t noticed Boris criticising developers for offering their latest inner London schemes in the Far East before they go on sale to Londoners. And I don’t recall him protesting when flats in two yet unbuilt tower blocks in Stratford went on sale in Singapore with the comforting assurance of “NO SOCIAL HOUSING”.
The solution to the housing crisis is, as we all agree, to build more. But most of the 30,000-odd homes currently in the inner London pipeline will be priced at least twice as high as those in areas nearby, and marketed in faraway lands of which we know little.
The inevitable result will be for all prices in those adjacent areas to quickly rise to match the new. Their owners will be sorely tempted to sell up, cash in and move out. The owners’ children will have a big problem if they want to stay in London.
While standing up for “overseas demand” because it is “critical to the economics of many of the developments”, Boris ignores the fact that these developments are largely the work of foreign investors, on behalf of foreign investors. Even those buyers who will eventually let out their flats will demand rents well above what locals can pay.
So come on, Boris. You are the Mayor of London. The people who elected you need to live not in an “asset class” but in a house. And if you continue to stick your head in the sands of denial, you deserve to have your arse kicked.