Time to Stop the Oligarch Cranes
By London & Eastern Regional Committee Chair, Jim Kelly
On Saturday 31 January, on a cold wet windy winter day, another protest march against the madness of London’s housing market took place, building on the protests against the International Housing Fair, Mipim, at Olympia in the autumn. Two feeder marches, one from Shoreditch, the other from Elephant & Castle marched to City Hall to focus the Mayors mind on the effects of his “Oligarch Cranes” policy on ordinary Londoners.
The march locations were significant. Both areas have seen significant social cleansing in the last five years. What was positive about the Shoreditch march was the large number of young people joining in. Both these areas would have been affordable to young Londoners wishing to buy or rent just five or six years ago. Today’s rents and prices mean only the very wealthy or young people with rich parents can afford to buy or rent.
Most one bed properties in the two areas start at over £225,000 and that doesn’t normally buy much. Monthly rents for a one bedroom flat are over £1,000 a month without rates, gas or electricity. There no point in improving any rented accommodation because leases are usually only for 12 months. If you are too vocal in demanding repairs or improvements you are shown the door at the end of the 12 months period.
The root causes of the problem in London are the lack of new council homes, Right to Buy and inadequate regulation of the private renting market. Another major factor is the increases in council rents due to pushing up costs to “affordable rents”. This means 80% of market rents. As Steve O’Rourke the Convenor of Metro line pointed out recently, this would mean his flat in Upper Holloway could cost more than his total income as a bus driver.
At present, for every one new council home built in London, five are being sold. Even tenants in social housing are vulnerable to social cleansing in Boris’s dysfunctional London housing market.
Although nearly every young Londoner is a loser financially and socially in this broken housing market, there will always be a small percentage of winners. Billions of pounds of tax payers money goes straight into the pockets of landlords, the amount has quadrupled in the last 10 years. Overseas “investors”, including crooks wanting to stash their loot, use London’s housing market as a convenient safety deposit box. Return on profits are far larger than any ordinary bank saving account, far less volatile than the stock market and this transaction does not appear to attract the scrutiny of the law.
It really shows how broken the system is when new build flats in Abbey Wood, Abbey Tower, start at £550,000 and are marketed exclusively in a 5 star hotel in Hong Kong are sold out in a couple of hours. The new Cannellelo building across the road from Ron Todd House in Islington was marketed exclusively in the Far East, off plan, and one bed flats started at well over £600,000. One had been resold at a huge profit before the foundations had even been laid. New figures show 80% of homes in London are being sold to foreign investors.