The Conservative party manifesto promised that when the party was in power it would charge foreign buyers of homes in England an extra 3% on the purchase price in stamp duty. Such levies have been used in Canada, Singapore and Australia to tackle housing crises. However, no mention was made of the charge in the Queen’s speech. If it does not pop up in the budget the Conservatives would have missed a chance to show they understand how voters feel crowded out of the housing market while wealthy overseas buyers are crowded in.
Estate agents say the proportion of homes in England and Wales let by overseas-based landlords rose to 11% during the first 10 months of 2019, the first year-on-year increase since 2010. Nearly one in five of London’s homes are rented out by people not based in the UK. The trend is not just visible in the capital. The east of England recorded the biggest jumps in the number of overseas landlords. People say they are being priced out of living in Manchester because of foreign cash.
Five years ago the then outgoing head of planning at the City of London warned that Londoners were finding it hard to buy homes because of “dirty” Russian money and “Chinese gamblers”. The providence of investment cash is not always so tawdry. But there is a feeling that it is wrong for property to be seen purely as a financial product yielding a return when voters cannot afford homes for themselves. There is a wider cultural unease that needs to be appreciated. The impression that needs to be countered is that ordinary people are losing ground to a wealthy elite. Some rich people just buy property and then leave it empty. This is the absurdity of rows of “ghost houses” in London at a time when the living cannot afford to put a roof above their head in the capital. In a globalised and hyper-commercialised world, some think it is fine that everything has its price. That logic leads one to say that if a foreign billionaire can pay more than a local can, he or she should be able to whatever the consequences. This is a poor view of the sort of society we should want.
What is a concern is that, in a packed list of housing announcements in December, ministers avoided any measures that would have had a real impact on the UK housing crisis. There were no house building targets. No mention of social housing. And perhaps most glaring given the election campaign pitch, no acknowledgment of the proposed surcharge on foreign buyers. There needs to be less glorification of power and money and more thought given to the wellbeing and needs of citizens. In parliament Conservative ministers say they will deliver “hundreds of thousands of affordable homes”. We have been here before. In 2015, the Tory government promised to build 200,000 affordable homes. The National Audit Office found in 2019 that none had been built. In this country the impact of foreign cash has been to disfigure urban skylines with glass and steel apartment blocks. It would be better for local strategic authorities and mayors to be able to impose height limits and force developers into providing more community benefits and social homes. If foreign investors leave then house prices will almost certainly cool and people might be able to afford homes. That seems a win-win situation for everyone.
