ADD2054 Overseas investors in London’s residential property market

Type of decision: 
Assistant Director's decision
Code: 
ADD2054
Date signed: 
06 December 2016
Decision by: 
Jamie Ratcliff, Assistant Director of Policy, Programme and Services

Executive summary

The Mayor is committed to developing an evidence base to understand the role that overseas investors play in the London housing market. This ADD authorises expenditure to commission specialist consultants to undertake this work.

 

Decision

The Assistant Director approves the commissioning of consultants, through a mini-competition, to support the GLA’s work to consider the extent, nature and role of overseas investors in London’s housing market. The commission is for a maximum value of £32,000.

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    The GLA wishes to commission consultants to undertake the most extensive research ever undertaken in the UK into the nature of overseas investors in the London housing market. Public concerns over overseas buyers’ role in the housing market have grown in recent years, and in response the Mayor committed in his manifesto to introduce policies that give ‘first dibs’ to Londoners, enabling Londoners to have greater access to new homes built in London.

1.2    In order to develop policies that support this manifesto commitment, it is necessary to understand the role of overseas investors in the London housing market. The existing evidence base is increasingly historic and is limited in scope. Specialist consultancy support is therefore required to undertake independent and detailed research to establish the extent to which overseas investors operate in the London housing market. This work will need to take into account their role in financing development, the location of their activities, and the extent to which they add to London’s housing supply. Further detail of the exact nature of the work to be undertaken is set out in the draft research brief.

 

Objectives and expected outcomes

2.1    The objective of the research is to significantly improve our understanding of the role of overseas buyers in London property market in order to inform public knowledge and policy-making. The outcome will be a robust evidence base that will inform the development of the Mayor’s housing and planning policies. More details of the specific research objective are outlined in appendix 1. The main output will consist of a detailed report of the consultants’ work, currently scheduled to be completed by March/April 2017, with an interim report to be presented to the GLA in early 2017.

 

Equality comments

3.1    The aim of the work is to enhance the GLA’s understanding of the London housing market, the extent to which residents are able to access housing in the city and how this affects housing outcomes in London. The Integrated Impact Assessment of the London Housing Strategy states that delivering new housing, including affordable housing, is likely to have broadly positive benefits in relation to social and economic sustainability objectives such as improving health, reducing inequalities, increasing accessibility, and economic development. Any new policy documents arising from this research will be subject to a similar assessment.

 

Other considerations

a)    Key risks

4.1    The key risk associated with this piece of work is the highly visible and controversial nature of the subject. It is important that the work is seen to be as independent and thorough as possible. The challenge will be to ensure that a work of sufficient depth is delivered within the timescale set and for the budget available. This risk will be mitigated by ensuring that as wide a range of potential bidders as possible are encouraged to bid for the brief, and that these bidders are seen as independent from the property industry.

b)    Links to Mayoral strategies and priorities

4.2    The Mayor’s manifesto committed to improving Londoners’ access to new homes. The Mayor has since committed to commission ‘the most thorough research on this matter ever undertaken in Britain’. 
 
c) Impact assessments and consultations

4.3    Any new statutory London Housing Strategy containing policies that are relevant to this issue will be subject to two rounds of consultation and a full and independent Integrated Impact Assessment. Any new London Plan will be subject to consultation and an Examination in Public. 
 

Financial comments

5.1    This decision requests an approval to commission consultants, through a mini-competition, to support the GLA’s work to consider the extent, nature and role of overseas investors in London’s housing market.

5.2    The expenditure of £32,000 is available from Housing & Land Management and Support Consultancy Budget and will be expended in 2016/17 financial year. Any changes to this proposal, including the requirement of additional funds, will be subject to further approval via the Authority’s decision making process.
 

Planned delivery approach and next steps

6.1       We will procure consultants by sending the brief to at least six potential bidders asking for tenders to be submitted to the GLA for consideration. Following receipt of the bids they will be considered according the criteria set out in the research brief and then a shortlisting and interviewing process will take place.

6.2       Once the successful consultants are appointed, an inception meeting will be held to establish and refine the timetable and methodology for the research. Following this, GLA officers will be in regular contact with the researchers to ensure that the outputs described in the project brief are delivered.  

 

Activity

Timeline

Distribution of brief to consultants

Late October

Appointment of consultants

Late November/Early December

Delivery start date

Late November/Early December

Completion of report

March/April 2017