Affordability of housing is a major issue in London. Why do you think this is? Who does it affect?
affordability does not really exist.
the affordability factors are set on incomes of £50000 in most cases very few people earn this amount and of those that do they can normally afford a property anyway.
part buy schemes set ridiculous income requirements so as to remain affordable for the majority
As a first time buyers on a very good salaries I find it ridiculous that my husband and I cannot afford to buy a flat anywhere near the area I have lived for more than ten years - Fulham. We work very hard and contribute to our community and there is no incentive offered to encourage us to buy. Even a reduction in stamp duty for first time London buyers would make all the difference. Our neighbourhood is full of buy to let landlords, most foreign, who invest nothing in the community and very little even in upkeep of the buildings they buy. Surely London housing needs to be prioritised for the people who live and work here and want to build a permanent community. We don't expect a discount on market value, or any kind of free housing but tax and duty reductions or elimination to help us to compete would be a huge incentive. First time buyers pay no stamp duty in Australia, and receive a government grant for their deposit - this scheme would work very well here for Londoners! Please look into it! Thank you
Why does the nationality of the buy-to-let landlords you perceive taking over Fulham matter to your argument?
And don't the renters who live in those properties represent "people who live and work here and want to build a permanent community".
Your proposals (reduction/ no stamp duty; other tax or duty reductions/ elimination; deposit supported by government grant) all do actually represent "a discount on market value", as they would save you money from the equivalent total purchase cost. Each of these proposals would increase demand, and so likely prices.
Thanks Ross- I think you mis understand- I am a renter in this area and I do want to establish and contribute PERMANENTLY- with short term tenancies, this is hampered as renters' location is not secure. You have highlighted that more is done to secure longer term tenancies for people like us. Thank you. And yes I do want an incentive that gives us an advantage - this is indeed what I am asking for local people who live and work in London - this is what this consultation is addressing is it not?? The scheme is very successful in Australia - we should be assessing such supportive schemes - and tax cuts associated - to help first time buying Londoners like me as the housing values in London are off the chart on affordability scale- Hense this consultation asking for ideas....
For this idea to work I guess central government would have to be involved too, but perhaps if somehow the Mayor of London could start the process off it could then gather traction.
Anyway my idea would be for affordable housing to be made the priority for all developers. I'm sick and tired of watching nice buildings being turned into 'luxury flats' or new developments springing up with no concern for the neighbourhood or the people who need to work in the area and want an affordable home. I'm sure we're all sick and tired of this. So how do we persuade developers to do the right thing, and stop chasing the megabucks by building properties that stand empty for their overseas owners to make money from?
I suggest a carrot-and-stick approach. Just like when we were all persuaded to wear seatbelts, only this time using the tax system. Give substantial tax credits to developers for building good quality affordable housing - perhaps in London it could be linked to business rates and other forms of financial control the Mayor has a say in - and increase corporation tax for every luxury flat completed. That means those wanting to pay for an expensive flat will still be making a proper contribution, while there's a genuine incentive to building good affordable housing for everyone else.
What other forms of financial incentives could work? What other means has the Mayor got to turn on, and off, the taps, to push developers to do the right thing?
Who does this affect? Absolutely every single Londoner.
The high cost of housing is partly cos the rich want to be here, & they don't care if they drive out the poor. The poor are affected most. I believe Barcelona has taken steps to keep down housing costs.
Everyone: I would like a house/ a bigger house/ a nicer house/ to live in a nicer area of London.
Everyone: I deserve a discount/ no tax/ rule exceptions/ special consideration
Everyone: I am more local/ more essential/ more friendly than the mysterious 'other' people that I believe are preventing me from achieving my desires
Everyone: Thus, something must be done.
It is expensive to live in London, like other brilliant global cities. Demand outstrips supply.
Until we agree to ration demand, or that some people are more important than others and they should get a better housing deal than everyone else, we will not artificially solve "affordability". It is important to note that these scenarios only work for a few winners - if you discount the price for everyone, you've discounted the price for no one.
Or we could build more homes to make all housing more affordable.. but...
Everyone: I don't want them to build homes near me because my house price will fall/ they're ugly/ the roads are too busy/ the school is already full/ you can't build on that grass/ etc etc...
A list of sentiments I don't agree with personally, but please share your personal situation and your proposals for a solution to making London Homes more affordable?
It is because you sold all council properties to tenants for peanuts and our government invites unlimited number of low educated, not speaking English, unemployable immigrants.
Developers are allowed to market flats as 'luxury' and thereby add £££ onto the asking price. Given the current housing situation developers should not be allowed to do that. And as others have said even so called affordable flats require people to be earning good money to think about buying them.
i agree.. there's absolutely no need for it.
Like the NHS and so much else, the problem is the government and establishment who like the status quo because they can make money out of it.
If they wanted to help us, they would empower councils to take over derelict housing and turn it into social housing, and build human-scale low-rise social housing on brown-field sites.
Part buys are HILARIOUS.... last time I looked into this option I needed to earn £70k to qualify......how is £70k low income? You laugh you cry you give up.
And another thing... you pay X amount rent every month which apparently you can afford....but you can't get a mortgage for equivalent property due to low income/self employed/gig worker. Yeah makes perfect sense despite mortgage being cheaper.
Why is filling the pockets of private Landlords good for the country? I'd rather pay my council fair market rate rent and know its going back into the system than paying for my landlords extended cruises and 2nd home in south France.
"Affordable housing" is NOT affordable, merely a little cheaper than the rest.
The problem is too many people buying properties, not to live in, but to rent out and make a fat profit.
I suspect a lot of these buyers do not even live in this country; they just buy as an investment.
The affordability of housing in London, like everywhere else, is directly related to its availability. Make more houses available and prices will stabilise and, with inflation, gradually become more affordable. Obviously, more houses means more land to build them on and this is the crux of the problem.
The idea of the Mayor's Office having first choice on the purchase of any land suitable for housing, has merits, as it would allow the Mayor's Office to set conditions for the types and prices of housing to be built there.
Obviously, such a scheme is dependent on land being purchased at a fair price. Either that, or give the Mayor's Office the power to compulsorily purchase the land.
The real reson that housing is no longer affordable for most people is directly related to the current government's fiscal policy. By attempting to suppress inflation and by reducing the Bank of England interest rate, there are no accounts that would pay the kind of returns that can be got from dealing in property. This has produced a situation where houses have become the new gambling chips and the value of property has risen exponentially. I have no doubt that there are properties all around London which have not seen a tenant in the last 5 years and are being held purely as assets in someone's portfolio.
There is a very big bubble building that is due for a bang before too long. When this happens, the rich will again get richer while the poor will lose all they have.
Affordability used to be linked to income rather than a number plucked from the air by out of touch politicians. I have been homeless for nine years, either staying with friends and family or living as a guardian. I now earn slightly more than the average wage as a lecturer yet I still can't afford to rent or buy, even on a part rent, part buy scheme.
There are too many investment properties and too many 'luxury' properties.
Thanks everyone for sharing your views so far.
Many of you have mentioned the high cost of housing. What help should be available to those who can't afford housing in London? Who should provide this help?
the existing schemes dont go far enough, they set you up to fail
Bring back 100% mortgages. I purchased my first home with a 100% mortgage from the Greater London Council (GLC). I would not have been able to afford the deposit without this facility. Councils also used to be able to provide mortgages. This could be reinstated to help young people get onto the housing ladder. Proof of affordability could be based on rent they have been paying - high rents in London makes it difficult to save for a deposit. However,,if buyers can demonstrate the level of rent they are paying would be in line with any mortgage then this should be proof that they can afford their 100% mortgage.
no mention that all these flats being built are leasehold? I.e. you are still a tenant even though you are spending £ hundreds of thousands on it? #leaseholdscandal
I agree - also feel that new leaseholds and those being reviewed should be in excess of 250 years - 999 years being fairer in view of the price being paid for these homes. - should be as close to freehold as possible. Also the cost of extending leases should come down - leaseholders should not have to keep topping up the length of their lease to maintain the value of their leasehold property. Top ups should be for longer terms. Ground rents and service charges should be better regulated and fairer.
It simply makes no sense to price workers (at all wage levels except the very highest) out of our economically most productive city - especially when we're still trying to shake off the effects of the financial crash.
London's economy will suffer - growth is already slowing as workers leave, or don't come in because the price of housing reduces their overall disposable income to levels they can't afford. Even those who stay have lower disposable incomes, leaving less to spend in local shops, restaurants etc etc. In turn this means lower wages, fewer jobs, less tax paid.
I've contributed to London's economy for 20 years but have been forced out - let alone the personal anguish this causes, London no longer receives the benefit of my labour, my council tax nor my disposable income. I'm a well-paid professional so how will our essential services survive if the average worker can't afford to live in London. I hear that the prisons and ambulance service are already in recruitment crises.
House prices are destroying London, and the UK as a result - I know several people who've left London in the last 2 years - some elsewhere in the UK, others emigrating. With Brexit and an older population and a country that no longer wants immigrants, just who exactly is going to do the work which produces the taxes and the GDP? In the long run, it's wrecking the whole economy.
In the 1960's and 1970's we had a thriving house building sector producing many more houses than are built today. If you ask any builder or construction professional they will tell you that the biggest single factor in restricting house building is the planning process. This not only results in far fewer houses being built but adds significantly to the cost. Not just in planning department required changes to designs but in the delay and the longer a developer or contractor has to hold the land before he can build the more it costs him and he will inevitably pass on the cost to the consumer.
While I concede the planning department has it's uses, the introduction of planning legislation in the 1970's led to a huge increase in the number of planners and a corresponding reduction in the number of houses built.
It is time that the numbers in this bureaucratic system are reduced to the benefit of both council tax payers and those requiring housing. There should also be time constraints so that developments proceed in months not years.
We need more housing in London and at affordable levels and it is time a critical look was taken at the planners.
Affordability is a major issue, and one of the worst aspects is that families of locals who were born and raised in London are being broken apart,and our communities are being broken up with it.
There are simply too many people moving to London - whether it's the hipsters who treat each town like an Apple product on a ln update cycle or foreign "investment" where people are using outlet housing stock as a safety deposit box, the problem is the discrepancy between supply and demand. At this stage we can't realistically meet demand, so as well as increasing the number of GENUINELY AFFORDABLE houses, completely curtailing the "luxury" flat market by stopping thslese overpriced developments, we must also cut demand. Make it harder for non-Londoners to move here. Maybe some kind of visa system.
- no more "luxury" developments granted planning permission
- no more foreign investment from China, Russia and the middle East etc.
- restrictions on who can buy property, prioritising London natives, i.e people who have their roots in London (schooled here,family roots or living here from a young age)
Blindingly obvious housing is increasingly unaffordable in London, not helped by new developments aimed directly at investors (with local residents social cleansed to make room for them)
The so called affordable housing is not affordable. I keep being sent shared home ownership property lists showing a three bed house which as 100% share is £800,000. I know the land they are building on was bought cheaply so they are making a huge mark up on the buildings. I would like to know just who is buying these places as they are surprisingly soon occupied but not by locals. Why can't London be like Jersey or Cornwall where you have to have a local connection to buy more affordable lower value older properties which seems to be all bought up by buy to let property companies.
Investing in property is popular means of acquiring capital,pushing up prices and leading to profiteering at the expense of potential first time buyers, renters. This is very unfair and skews the market impacting supply and demand. Mortgages should not be given to commercial landlords,only to private owner occupiers. Councils should requisition private property owned by foreigners and left empty for more than a year.
I see there being a series of "cause and effect" impacts on housing costs.
1. The "Right to Buy" scheme was implemented without the requirement for councils to replace the social housing that was sold ... therefore as social housing stock is reduced, more and more people are forced into the private rental sector, thus reducing private rental stock and driving up prices
2. In addition, the planning process is unbelievably labrynthine and complex ... which causes delays to construction and increases the developer's costs ... which they pass onto purchasers, including local housing authorities
3. Developers are able to pay money to councils to get themselves released from obligations such as building a percentage of homes as social and affordable housing ... although this money is meant to go to initiatives in the area, in reality it will not go towards housing, therefore not enough social housing stock is built ... and all housing stock being built in the area then becomes "luxury", not affordable
4. Agents have significant power and are partially responsible for the escalating cost of housing ... keeping up with the Joneses to allow agents to make as much commission as possible from landlords and vendors
All four of these issues need to be addressed - it is not simply a question of building more homes, but rather building enough of the right homes and applying controls to the house building and estate agent sectors. London does not need "luxury" homes; it needs affordable and social homes to reduce the burden on the private rental sector and thereby return some power to private renters who will then need not be afraid to speak up about poor standards and quality of accommodation. There needs to be a limit in the rate of increase of rents and developers must not be allowed to get out of building affordable homes by buying their way out of their obligations.
Thanks for your views and suggestions.
Some of you have mentioned foreign ownership. How big a problem do you think this is in London? What should help with this?
I have recently commenced renting a one year old one bed apartment. Having viewed many new build apartment blocks and chatted to the agents regarding these, its ownership and use is pretty standard for these new "flash" apartments. Our block is 60% rented to rich overseas students and 40% mainly rented to london workers according to the managing agent. The ownership is mainly overseas investors. It was marketed in Singapore. The cheapest apartment sold according to rightmove is just under one million.
I was shocked to see and experience these statistics. Why are there not planning laws that prevent blocks being marketed as investment opportunities to overseas owners? The developers will obviously sell to the highest bidder - that is their business plan. But, just as Guernsey and st Ives (I believe?) zone areas or properties for locals only, and have a two tier property market, why can't London?
Further to my first reply, I have also experienced living in another new build apartment block. Again, it was mainly owed by non citizens. This time, they were mainly left empty except for our cooler summer months. What a waste of housing, empty most of the year, when there is a great need for Londoners to live in London. Again, the planning laws could be changed to have locals only developments.
It is grave problem in Central London mainly but fast expanding beyond. London has become a money park for assorted plutocrats who evade tax, assorted kleptocrats who park their loot in London real estate after having plundered their home countries, AML checks are hugely deficient and everyone is turning a blind eye. The new laws on disclosure of beneficial ownership etc are a good start but nothing has been actually done yet in practice.
There should be a property wealth tax paid annually on the current value of the property. Tax estimation should be updated to reflect the commercial value. Far too many non UK residents own vast chunks of property across London , leave them empty or let them cash or through airbn etc and pay zero tax. This is disgraceful.
I read the study about foreign ownership prepared by London Economics.
Firstly, it does not define a major reference point, what does "empty home" mean? The study authors assumed that if a property is occupied a few weeks per year, then it must be occupied. The question that should have been asked is "How many properties are occupied less than 6 months per year? A property is considered empty if it is occupied less than 6 months. Ownership type (Foreign, British, Company, Private individual) is completely irrelevent.
Secondly, the study methodology is flawed. It took a sample of Land Registry titles for new builds in London and looked for foreign ownership. It was rather naive to think that foreign investors own directly the properties. Most of them would want their details hidden thus would use a company, most likely UK based, to make the investments. The study should have looked at company ownership albeit it is impossible to know how much of the funding comes from abroad, and the overall level of investment (foreign or not it is rather irrelevant) and property turn-around (many property are sold very quickly for a profit).
Thirdly, I don't think there is a need for a study at all to introduce a cap for foreign & company owned properties. The Local Government should issue a number of investment licenses per year for new builds and previously owned properties.
Finally, as far as I know a lot of Pension funds invest in property. It is likely that these types of investors keep the properties empty.
the problem is huge. too many empty investment properties to launder foreign money. if a property is empty long term (6 months or more excluding properties being renovated) they should receive an annual bill of 5% of market value which will only be removed once the property has been occupied for 2 years continuously if they become empty again they would then incur the 5% market value tax again.
if its not paid then the property is repossessed for use as council housing