The number of London homes controlled by foreign investors has been labelled a “huge concern” by a Lewisham MP, after new figures revealed that tens of thousands of homes in the capital are owned by overseas developers.
Joan Ruddock, Labour MP for Lewisham and Deptford, told the Guardian that the vast number of residential homes trapped in the clutches of international investors was “global capitalism and we have to find a way around it.”
Data released last week, has shown that, in Lewisham, 60 per cent of the 5,872 large scale developments planned for the borough will be controlled by foreign or joint owned investors.
In Hackney, international investors will account for 27 per cent of proposed large developments and in Tower Hamlets 21 per cent will be internationally owned.
This influx of foreign investment has triggered fears that London property is being built as an investment for overseas buyers rather than a means to meet the capital’s housing needs.
Ruddock said: “There have to be some tougher controls about the balance between housing for the more well-off and affordable housing, and I mean genuinely affordable. The capital will not be sustainable unless people in the public services can afford to live here. We are pricing them out.”
Convoys Wharf, Deptford’s contentious £1.9 billion redevelopment of the former Royal Dockyards, from Hong Kong conglomerate Hutchinson Whampoa, has raised concerns from politicians, housing activists and local residents since 2008.
Only 15 per cent of the development’s 3,500 homes will be “affordable” and some “residential towers” will reach up to 40 storeys high. Architectural firm, Rogers Stirk Harbour & Partners, state that “these high rise buildings [will] deliberately alter the skyline… acting as markers of regeneration”.
Darren Johnson, Green Party member of the London Assembly, said that selling homes to cash rich investors “helps homes get built, but it does not help Londoners buy their own home”.
He said: “Wealthy individuals buying homes just as investments, not even to let them out, is the pinnacle of a system that is putting our city into the hands of a shrinking elite.”
Woodberry Down, a former council estate in Manor House, Hackney, will see 2,000 council homes demolished and replaced with more than 5,500 residential units by 2031. These will include a small amount of social housing and affordable housing for “key workers”, with the majority to be sold on the open market.
The development’s luxury private block, Woodberry Park, has largely been marketed to foreign investors with residential units, boasting “deluxe” and “premium specifications”, ranging from £395,000 to over £1 million.
Two of the Park’s residential complexes, “New River Gardens” and “Waters Edge”, are already entirely sold and were advertised in brochures advertising Harrods, Louis Vuitton and Selfridges.
Tower Hamlet’s Canary Wharf is also one of many financial districts in the capital to attract attention from foreign buyers. The area’s HSBC tower, designed by architect Norman Foster, may break the UK record as the most expensive building ever sold, if the Qatar Investment Authority complete negations to pay £1.1 billion for the property.
Concerns over the huge influx of foreign investors buying residential property in London were indicated in Labour’s Lyons report, released in October. It highlighted “a concern in some parts of London where there is a fear that local people will lose out to investor landlords and foreign investors”.
The report’s solution is to provide local people with first refusal on homes built in their vicinity for up to two months allowing them to buy properties before third parties. However, this has been deemed an insufficient period for local buyers to purchase new build properties, especially when residents may be wary of purchasing real estate before it physically exists.
London Mayor, Boris Johnson, has been openly in favour of international investment, providing the key note speech at last year’s MIPIM-UK property conference, where he branded opposers as “xenophobic left wing commentators”.
Richard Blakeway, London’s deputy mayor for housing, land and property, said: “Foreign direct investment, together with traditional institutional finance, is helping to unlock developments that have stalled for many years, allowing thousands more homes to be built for Londoners far sooner than would otherwise be possible”.
Further figures revealed that just 10 investors based in Hong Kong, China, Malaysia, Australia, Singapore and Sweden own nearly 30,000 of the capital’s homes.
More than 21,000 homes in central London are also now part of plans from developers in mainland China, Hong Kong, Singapore and Malaysia, according to residential consultancy firm, Molior.