Everyone agrees that “Britain’s housing problem is one of supply and demand. If only they could build more homes, the crisis would ease. But it’s not that simple. For instance, in London new flats are going up all the time, yet housing remains in chronically short supply because so many properties – old and new, but mostly new – are being sold to overseas investors. In 2012, foreign buyers accounted for almost three-quarters of new homes sold in central London. And many developers and estate agents now market their properties in China and elsewhere before even offering them for sale to people who live in the UK. (This is absolutely true. Ed). It sounds “almost racist” to object, but the result of this speculation has been to push prices to crazy levels in London, with knock-on effects for the rest of the UK. It’s a relatively simple problem to fix: we could just “ban the ownership of housing by foreign non-residents, as they do in Norway and Australia”. We need more homes, but there’s not much point in building them if they’re just going to stand empty. (Zoe Williams, The Guardian)
I have to declare an interest. I was born in London, am a British citizen, and still have a flat in London, although I also live in America. My family has lived in and around London since 1672. Within walking distance of the flat are six Russian oligarchs and, as far as I can ascertain, only one family, a hundred metres away. I am conflicted about all this – British-born people used to live in London and now have to commute; the young people are priced out of the property market, and shop and restaurant jobs are filled by foreigners who are often there short-term to improve their English and who undercut the British. This all feeds into the desire of many voters to exit the EU and stop immigration.
But if you could force the thousands of foreigners to sell and go home (practically speaking impossible) the prices are still too high for most British people. We have created an increasingly exclusive city State on a rather small island. Maybe one could ban all future house purchases by foreigners; or introduce a super-property-tax for the non-British citizens; or slap a purchase tax on foreigners buying property, say 20% of the property value. What do you think?
The rot set in when the UK government offered residency and a British passport to people who “invested” in Britain. Nobody protested at the time that “investment”might mean buying up apartments and houses in London. How much real “investment” has there been in the economy and how many jobs have been created with this dubious come-hither offer? A suspicious person might conclude that members of the Conservative government with houses in London have made a tidy personal profit? What a suspicious mind!