International Sales of London Homes

MQT on 2014-11-19
Session date: 
November 19, 2014
Question By: 
Tom Copley
Labour Group
Asked Of: 
The Mayor


Do you agree that housing developments built in London should be marketed to Londoners before they are sold overseas?


Answer for International Sales of London Homes

Answer for International Sales of London Homes

Answered By: 
The Mayor

Boris Johnson (Mayor of London):  Yes.  I do think that homes should be marketed to Londoners first or first-equal.  It is difficult to exclude foreigners.  Someone will say they cannot see them under European law because we live in a single market.  Many so-called foreign buyers are Irish, French or whatever. 


Tom, it is still the case - and I really have insisted that my team go away and thrash these figures out again because I wanted to be absolutely sure - that overseas buyers account for about 3% of London’s transactions and about 6% of the value.  Yes, there are cases - and I have seen them - of big new developments where seemingly a dismayingly large proportion of homes are being bought by overseas investors.  It is important to recognise two points.  The first is that to get those developments going, you often need the upfront cash that those buyers have.  The second point is that those homes will not necessarily be occupied solely by the international investors; they will be available for rent by Londoners. 


Tom Copley AM:  I want to talk about your concord which 59 developers have signed up to, which says that they are committed to marketing homes in their developments first or first-equal to Londoners.  How are you ensuring that developers honour this commitment?


Boris Johnson (Mayor of London):  Those which do not - and there is one case in particular; I think it is Galliard which has not done so - we have named.  We are seeking urgent consultations with them and we have struck them off the list.


Tom Copley AM:  They have been struck off a list.  You said in response to a question from Nicky Gavron that the concord is a voluntary agreement based on goodwill.  What sort of monitoring is there?  Is it simply based on when these things are reported to you?


Boris Johnson (Mayor of London):  Obviously we do not have our own police service to go and vet every contract in London.  You know, these things emerge pretty quickly and ‑‑


Tom Copley AM:  Yes, are you aware?


Boris Johnson (Mayor of London):  ‑‑ one case has emerged ‑‑


Tom Copley AM:  You have mentioned one case.  I believe there is another case here of the Battersea Power Station Development Corporation.  Are you aware that it is violating the agreement?


Boris Johnson (Mayor of London):  I am not aware of that.  If you have evidence of people violating the agreement, then you should bring it to us and we will ‑‑


Tom Copley AM:  It says a number of homes in the third phase of the development were marketed in the United Kingdom first, but the Evening Standard reported that 539 of the 1,305 homes in the third phase of the development are being kept in reserve to take on international roadshow starting next month.  Are you aware of this?  This was in the Evening Standard, your favourite newspaper.


Boris Johnson (Mayor of London):  If there is a failure to market those homes to Londoners and if they are being restricted to international investors in some way that goes against the spirit or letter of the concord, then we will get them in.  Battersea is one of the sites where you could look at the proportion buying those homes from overseas and say, “What is in this for Londoners?”  


Tom Copley AM:  Absolutely, can I ‑‑


Boris Johnson (Mayor of London):  Can I just give you the answer?  The answer is that actually many Londoners do buy homes, even on these big prime projects, but also that the asset or the home is available on the London rental market.  It adds to the supply and that is a good thing.


Tom Copley AM:  Yes, but it is no good if you are a first-time buyer, is it? If you have international investors who are essentially outbidding first-home buyers and pushing up the price of property?  It is no good if you are a first-time buyer.


Boris Johnson (Mayor of London):  What you must do for first-home buyers is build tens of thousands, hundreds of thousands, more affordable homes and homes for part-buy/part-rent as we are doing.  What would be a deep mistake would be turn all xenophobic and hostile to international investment and to garb ourselves in the raiment of the UK Independence Party (UKIP) and say that we did not want nasty foreign money coming to our shores.  That is not the way forward.


Tom Copley AM:  Can I press you there?  In terms of the Battersea Power Station Development Corporation, based on what I have said today, will you look into this and see if they are indeed in violation.


Boris Johnson (Mayor of London):  I will.  Of course, we will look and see if they are indeed in violation.


Tom Copley AM:  Thank you.


Boris Johnson (Mayor of London):  I do not have any direct evidence that they are.  We have obviously worked very closely on that site for many, many years to get it going.  It is a triumph that Battersea is being rebuilt and it will deliver tens of thousands of homes for Londoners.


Tom Copley AM:  That is a good example.  He has answered my question.