Sunday, 18 August 2013

As the property market in the UK becomes ever more divided, politicians begin to wake up

The last post on this blog covered the scandalous state of the housing market in the UK. In London, where the problem was already at its most acute, all indications are that things have recently got even worse.

In August it was announced that the Buy-to-let market has surged, pushing ever more of the limited supply of properties into the portfolios of investors. This segment of the market is now larger than it has been since the financial crash and represents a far higher percentage of overall mortgage approvals than a decade ago.

Meanwhile, recent report have suggested, variously, that 'super-prime' properties in the London cost 10% more than they did before the banking crisis and up-market estate agent Savills has highlighted the fact that the most 'desirable' central London areas have been price crisis of 18% in a single year

Prices of homes in central London are now over £1.4 million on average. A huge driver of this has been overseas money, with figures indicating that 70% of new homes in the London were bought by foreign investors in the last two years. The knock-on effect means prices have risen across the south-east, as buyers are forced out of the capital. 

This blog has suggested proposed five solutions to the crisis:
  • Build more houses
  • Ban buy-to-let, or restrict it new-build developments
  • Introduce higher taxes on second homes
  • Bring in charges on homes left empty in the capital - legislation that exists in other countries.
  • Restricting the sale of property based on residency criteria or citizenship
Labour-run Camden Council has, in a rare sign that politicians are waking up to the crisis, proposed to pursue a hybrid of the third and fourth options - pushing the Government for the right to introduce a levy on empty second homes.

Let's hope that the Coalition makes the right decision. Despite the gleeful tones in which the media reports rising house prices, the fact is, as Faisal Islam recently put it, that in creating a housing bubble, "we're condemning a whole generation to paying absurd prices for what is a basic human need".

If the Government doesn't grant the Council (and other councils) the right to pursue similar policies, then we can expect the UK to become more unequal; a whole generation - excluding the offspring of the very wealthy - will be locked out of home ownership and our capital city will resemble more and more a physical bank account for wealthy overseas buyers. 

Sunday, 7 July 2013

Our capital is becoming a playground for the super-rich - it's time to ban non-EU citizens from buying property in London

We know a number of facts about the London property market:

We also know what is driving this situation:
  • We know it is caused by a shortage of new housing, with a tiny and shrinking number of 'affordable' homes being built in London.
  • We know that it is driven in part by the buy-to-let market, which saw a 15% rise in activity in 2012 alone.
  • We also know it is being driven by overseas buyers - including the global super-rich; The facts here are stark:
    • 73% of prime central London new-build homes were bought by foreign buyers last year, according to Savills.
    • 60% of buyers in central London areas such as Kensington, Chelsea and Marylebone are from overseas and for 37% of these their London property is not their primary residence.
    • Many of these - as well as UK-based 'property investors' - leave their properties empty. Research by Camden Council in 2012 found that 1 in 16 homes were left empty by their owners in their borough.
    • The result, as the commentator Simon Jenkins has put it, is that parts of central and west London are becoming 'a ghost town — bought by overseas money, then left to rot'.
Finally, we  know that we have a Tory Mayor in Boris Johnson and a Tory-dominated Government that are not just reluctant to address these issues, but have a vested interest in accelerating the status quo. This can be seen in practice through the Mayor's early decision on winning in 2008 to scrap the target for a minimum proportion of affordable homes in new London developments and in his recent decision to rubber-stamp the new Earls Court development. 

The latter will see the demolition of large numbers of social homes in favour of houses for the super-rich - something recently described as "the Tories' biggest social engineering project.... demonstrating ideology and gerrymandering and corrupting local government as never before".

The fact that a right-wing think tank report, when previewed on Conservative Home, described the electoral disadvantages for Tories of social housing in marginal parliamentary seats, shouldn't surprise. Coupled with the bedroom tax, both Boris and Cameron know that London is moving from a politically-balanced city with a left-leaning core to a Tory-dominated one, and at huge speed

What will be left, as Revd Dr Giles Fraser, priest-in-charge at St Mary's Newington, put it, will be not the economically and socially diverse city that has made London so unique and successful, but 'a playground for the super rich'.

Given political will, the solutions are there

Despite the political ramifications, this isn't a left-right issue. In the last year or two, even right-leaning papers like the Standard have been getting increasingly concerned over property prices, presumably as the market has now become so expensive that even the upper middle-class homeowners that make up many of their editorial team are now realising that 'bank of mum and dad' might not be enough to help their children jump on the ladder.

At the same time, there is a reverse property-ladder effect occurring, with the traditional residents of Kensington and Chelsea priced out by the recipients of huge bank bonuses, by oligarchs and the other global super-wealthy. Members of the former social group are now populating boroughs such as Hammersmith, in turn making these ares unaffordable for the upper-middle class buyers who would have once bought there. And this effect continues, so that the middle and working classes are increasingly priced out of the city completely.

However, on the positive side, we don't just know the problems and their causes. We also know the solutions:
  • We need to build more homes, and re-introduce a minimum requirement for new developments to have affordable - and genuinely affordable (not £500,000 a flat) homes. 
  • We need to ban buy-to-let investments completely, or restrict them to new build developments, and in turn stop treating 'property investment' in the tax system as though it is somehow equivalent to productive hard work. That we have many thousands of people who have made more from rising house prices than through their working lives is bizarre and unsustainable.
  • We need to introduce higher taxes on second homes
  • We need to bring in charges on homes left empty in the capital - legislation that exists in other countries.
Finally, we need to consider something even more dramatic than these measures to tackle the near-unlimited supply of wealth pouring into 'safe investments' in the capital. This money is unlikely to be deterred by higher taxes on second homes or on charges for property left empty. Crucially, this wealth doesn't create significant numbers of jobs, but merely hollows-out districts in the capital. It sustains only businesses - high-end eateries, exclusive shops and clubs - that are of little use to the majority, whilst forcing other, less exclusive shops, bars and restaurants to close. Its negative effects are far more corrosive than any benefits it brings. 

Labour's chance to be different - and popular

If it wants to differentiate itself from a Tory-dominated government who are happy to see the capital of the UK become nothing more than an investment portfolio for City traders, hedge fund-owners, the landed gentry, billionaire oligarchs and Arab princes, then Labour should implement the four suggestions above.

But it should also champion a policy that would demonstrate it is concerned about the living standards of the vast majority of British people and that it is willing to stand up to the dominance of powerful wealthy, about whom hypocritical groups like UKIP are so deafeningly silent.

Labour should ban the sale of property in London to non-EU citizens. 

Sunday, 21 April 2013

With the cost of living in London spiralling, the capital will be a Tory city within a decade

In April, figures showed that private rents in London are at their highest ever level, having risen a staggering eight times as fast than wages in a single year.

A recent report from the housing charity Shelter found that in five London boroughs, average monthly rent for a 2-bed property is now 75% or more of local median take-home pay.

This is part of a trend that has been accelerating over recent years, as the prices of London's properties push people that would ordinarily buy into renting. Reports in March confirmed that the cost of buying a home in London is now higher than in 2007, prior to the banking crash. Halifax, in a recent survey, classified 100% of London boroughs as being 'unaffordable' for first-time buyers.

The price of buying property has been driven by a number of factors, including the lack of new house building, the malign influence of the booming buy-to-let sector and the vast bank accounts of the global super-rich.

These last two factors are rarely talked about, but tackling them is crucial to prevent the majority of new houses built in the capital merely being swallowed up into the ever-larger property portfolios of the wealthy - and changing the political character of a city that has tended to lean left, even now.

The global super-rich

The influence of the very rich on London's property market can't be overstated. As the commentator Carole Cadwalladr put it today, "their effect on London's housing market has been nothing less than catastrophic", as she highlighted a study that found that 73% of prime central London new-build homes were bought by foreign buyers last year.

This is backed-up by other recent studies. Last year, Savills announced that almost 60% of buyers in central London areas such as Kensington, Chelsea and Marylebone were from overseas and for 37% of these their London property is not their primary residence.

Research by Camden Council in 2012 found that 1 in 16 homes are left empty by their owners in their borough, many of which would be due to the fact that they are a second (or third, forth) 'home'.

And the trend is set to continue. The number of "prime residential" schemes aimed at the super-rich at planning rose 70% between 2011 and 2012. The effect on inequality in London is startling: a study found that, in 2012, the top 10% of households by property wealth in the capital account for 45% of all household wealth. The bottom 40% have no or almost no household wealth at all.

The journalist Simon Jenkins railed against this recently; the property market, he said, "is clearing streets of their residents. It is erecting tower blocks of luxury flats along the Thames, which will stand as “fiscal launderettes” that are empty of occupants...These properties are not sublet. They pump no money into the local economy. They are Midas properties, a banquet of solid gold that is uneatable by anyone. Boris Johnson’s theory that these people are “bringing wealth to London” is laughable. They are stashing it here, that is all".


Another key factor in the crisis in housing in London is the impact of buy-to-let. Despite a dismal set of lending figures by the banks to first-time buyers, 2012 saw a 15% rise in buy-to-let mortgage approvals.

Underlying this is the fact that many first-time buyers, often with a good income, are unable to afford the huge deposits required to buy a house in London. Recent figures showed that an average first time house buyer would need to save for 24 years to accumulate the deposit required to cover a home in the capital. And, the forecast is even bleaker for those seeking to get a home of their own: the average deposit for a house in the capital is set to rise to a jaw-dropping £100,000 by the end of the decade.

On the other hand, buy-to-let landlords have the capital - and access to the best bank rates. For many sellers, the stability offered by this group of people is attractive. And so first-time-buyers are disadvantaged yet further.

London: a true blue city?

There is an array of policy tools available to tackle this problem. To address the cost of house purchases, a government could tackle offshore companies acting for anonymous overseas buyers, allowing money gained in potentially the most toxic ways to flood the capital.

To help reduce and control the cost of private rents, there is the option of a New York-style cap on rents and there is the concept of a London Living Rent - both proposed by Ken Livingstone.

To tackle both issues there is the option to levy charges on empty homes, as Camden Council suggested. And there is, of course, the option of increasing taxes on second homes, thus making buy-to-let investment less attractive and reduce the influx of money by the wealthy into properties then left empty. It would also restore life where there is now eerie silence in parts of prime central London areas like Kensington at weekends - or the 'ghost town' effect, as Simon Jenkins recently put it.

So, what does London's Tory Mayor, Boris Johnson, propose to do?

Nothing - as his Deputy confirmed recently.

And yet, why would he do anything? For it this trend continues, London will be a 'true blue' city, populated only by the wealthy, the very wealthy and - just occasionally enough to qualify for non-dom tax breaks - the mega-rich.

It will be, as Giles Fraser, the priest-in-charge at St Mary's Newington, put it, 'a playground for the super rich'. The super-rich that, as another commentator concludes, already "exist in a separate space, behind their gated drives, ring-fenced from the rest, convinced everything is fine".

It will have little or none of the social diversity that has made London such an energetic city, locating as it has done wealthy Primrose Hill next to more down-at-heel Camden and Kentish Town, or, in 1990s and 2000s, trendy, arty Shoreditch next to the towers of the City. It won't have boroughs like Southwark or Wandsworth, that see the rich, the middle-class and the poor live mere moments from each other.

But it will almost certainly vote Tory. And what could be more important to Cameron or Boris than that?

Wednesday, 10 April 2013

ICM Thatcher poll: voters believe that privatising the utilities and cutting taxes for the rich were wrong

One of the big myths about the triumph of Conservatism is that its key tenets have been accepted wholesale by the majority of the British people.

So, as the Tory press will suggest, people support the neo-liberal consensus: deregulation, competition, a minimal state and low taxes. At the same time, 'old' social democratic values are now rejected.

Except, as polling demonstrates, this isn't quite true. The fact is, evidence points to what Blair always thought - the British people are middle of the road. The population, taken as a whole, hold a set of beliefs, that over time may adjust, but broadly can be described as centrist - although admittedly sometimes contradictory.  

So, on the one hand, voters of all hues tend to oppose immigration - Labour, Tory and Lib Dem alike. And there is no doubt that attitudes to welfare (arguably due in a large part to the 'drip drip' effect of right-leaning tabloid horror stories) aren't exactly supportive.

However, let's take the latest ICM poll on Margaret Thatcher. It polled a representative sample of voters on whether they thought, on balance, some of her key policies were good or bad in hindsight. On the one hand, taking on the unions and (despite the massive housing problems London in particular now faces) right-to-buy, are both seen in hindsight as positive.

However, key aspects of Conservatism are rejected - and by large margins. So, for example, privatisation of the utilities are seen as negative. This, of course, is unsurprising: energy companies, like their rail counterparts, haven't exactly endeared themselves to the British public.

At the same time, voters now overwhelmingly reject cutting taxes for the richest. Only 28% in the ICM poll agreed that the reductions in the top rate was a positive policy. No doubt the banking crisis has contributed to this, but equally two decades since Thatcher left office have demonstrated that 'trickle-down' economics doesn't work: average real wages haven't increased in the USA since the 1970's.    

Interestingly, a YouGov survey released today found a similar pattern, with voters seeing privatisation of utilities in negative terms.

Tory voters aren't really as conservative as you think 

We shouldn't be surprised about the ICM results. Previous surveys from some of the leading polling firms have segmented voters by party preference, and found that Tory voters support - in some cases by large margins - the following:

Wednesday, 6 March 2013

As the UK economy stagnates, a few people that can say "I told you so"

It is worth revisiting, in the wake of an abysmal set of figures for manufacturing and - yet again - dire data on UK construction, the views of the minority of economists that rejected the economic plans of Osborne in 2010.

The Chancellor's plans, backed by the Tory press, the Mayor of London, the Prime Minister and, shamefully, the Liberal Democrats, have brought the UK to the brink of a triple-dip recession. Even if the services sector saves him from the humiliation of another recession, by April, Osborne will still have presided over an economy that will have barely grown since he came to power.

Coupled with this, wages are now a real concern, with the average Briton's standard of living continuing to fall. It is entirely possible that, come 2015, any return to growth will mean little to millions of ordinary people.

As a result of this situation, opinion polls now demonstrate that voters are finally rejecting the Tory approach of cutting public spending in the midst of a stagnating economic climate, where private spending is lacking. 

In light of all of this, let's consider this set of experts, writing in 2010. They were dismissed at the time by the majority of 'mainstream' economists and yet, well, they have every right to feel vindicated. Take David Blanchflower:
"A Harvard economist said to me recently that the coalition government's fiscal deficit reduction programme is the biggest macroeconomic experiment in an advanced country in any of our lifetimes.... He argued that no government, unless forced to, would be dumb enough to take such unnecessary risks with the well-being of the nation".

Or Nobel prize-winning economist Paul Krugman, who has written on numerous occasions about Osborne's folly. After joining a minority of economists opposing the Tories' 1930's style economics in 2010, he wrote this around a year later:
"Slashing spending in the face of high unemployment is a mistake. Austerity advocates predicted that spending cuts would bring quick dividends in the form of rising confidence, and that there would be few, if any, adverse effects on growth and jobs; but they were wrong".

Well, now, as Tory cheerleaders in the press desperately call for more of the same medicine, this small group of commentators can justifiably say: "I told you so". Sad, though, that millions of people will suffer anyway as a result the triumph of right-wing ideology over pragmatism or common sense.

Monday, 25 February 2013

Even Tory voters support a mansion tax

With the issue of housing costs finally climbing higher up the agenda of the media, albeit scandalously late, it is interesting to note that public support is at odds with the views of much of the mainstream press.

The Lib Dem's mansion tax - including the suggestion of it being extended to second-homes - is now supported by Ed Miliband's Labour Party. The prospect of the two parties voting together on the issue (however symbolic that may be) is now a distinct possibility, with Clegg's suggestion that the Tory Party is 'turning a blind eye to the super-wealthy' a sign of things to come.

The right-wing media has - as would be expected - criticised such a policy, even while finally admitting, hypocritically, that housing costs are getting out of control for the majority.

A poll by YouGov, however, shows that voters have a different view. Two-thirds of British people support a mansion tax on properties worth over £2 million, with a majority in favour of the tax to be extended to properties valued at over £1 million.

On balance, Conservative voters also favour a tax on £2 million houses.

That even Tory voters support the concept of a mansion tax shouldn't be surprising. Previous polls have demonstrated that Conservative voters (unlike the MPs and other leaders they elect) tend to support higher taxes on the rich, regulation of internships, a higher minimum wage and a host of other policies that the right-wing press vilifies.

Sunday, 24 February 2013

A middle-way solution to the scandal of the buy-to-let 'racket'

The Guardian's Patrick Collinson has penned an interesting piece on buy-to-let and its capacity to damage the chances of first-time house buyers to afford a first home. He asks why building societies, with their history of helping people purchase a home, are now more interested in the quick profits gained from lending to landlords:

"When a loan is granted to a landlord, it effectively means yet another property is removed from owner occupation.

It doesn't help that buy-to-let remains unregulated, with loans calculated on a cheap interest-only basis (with tax benefits thrown in), while today's first-time buyers have the full force of post-financial crisis regulation dumped on them".

As this blog has argued, it is precisely this issue of a minority swallowing up multiple homes that a Government one day soon has to confront. Collinson suggests a clever 'middle-way' solution, which would stimulate house building, control the frankly ridiculous costs of property in the south-east of England and avoid claims of a 'socialist' attack on aspiration that will inevitably come from the right-wing media.

His solution would be to restrict buy-to-let mortgages only to the construction of new property. This would avoid the current scandal of those in possession of multiple homes from hoovering up existing housing stock and stimulate new house building.

It would also restrict the explosive growth in private rental costs that make more and more of London unaffordable for tenants. There is no doubt, though, that even this reasonable suggestion will be fought tooth-and-nail by a small minority who gain a great deal from maintaining the status quo.

Sunday, 17 February 2013

A super-tax on second homes is long overdue

Recent posts on this blog have highlighted the obscene costs of housing in London, with some staggering figures provided by Shelter showing that in 5 London boroughs average monthly rent for a 2-bed property is now 75% or more of local median take-home pay.

A feature of the market is the degree to which the very rich are dominating the landscape - with the top 10% of households by property wealth accounting for almost half of all property wealth in London and the bottom 40% having almost no household wealth at all.

At the same time, those forced to rent in private accommodation are seeing record rental costs - jumping almost 5% in a single year.

Figures out this week, finally covered by the Standard (showing that the ridiculous situation is even bothering traditional Tory constituencies) show that an average first time house buyer without 'bank of mum and dad' will need to save for 24 years to accumulate the deposit required to cover a home in London. The average deposit is set to rise to a jaw-dropping £100,000 by the end of the decade. A recent survey from Halifax, meanwhile, classified 100% of London boroughs as being 'unaffordable' for first-time buyers.

Two major factors driving these prices are the distorting effect of rich second (or third, forth) home owners and also buy-to-let landlords hoovering up existing housing stock. These effects are illustrated by figures showing that almost 60% of buyers in central London areas such as Kensington, Chelsea and Marylebone were from overseas and for 37% of these their London property is not their primary residence. Even in the comparatively less affluent borough of Camden, 1 in 16 properties are left empty by their owners.

Meanwhile, last year saw a 15% rise in buy-to-let mortgage approvals. That house building growth has stagnated demonstrates that these landlords are buying existing stock, rather than stimulating new house building, and therefore pushing up prices for those seeking a home rather than an investment opportunity.

News today that the Liberal Democrats are set to consider a 'super-tax' on second homes, in a week that saw Ed Miliband back a mansion tax, is long, long overdue. The alternative will be a generation of people shut out from home ownership, trapped paying exorbitant rents to a minority of very rich landowners. Other countries have used similar policies to prevent the scandal of empty properties owned by the very wealthy resulting the the destruction of local services. It would have a dramatic - and positive - effect in London too.

The question will be whether the powerful vested interests that would stand to lose from such a policy, coupled with the resistance to 'taxes on aspiration' that many British people seem wedded to, will manage to bury what could be a transformative idea.

Sunday, 13 January 2013

Convinced it will lose the election, the Government is privatising as much as it can before 2015

The three most popular posts on this blog have concerned the NHS.

The first collated some of the advice that lifestyle magazines in the US provide to patients on how to haggle with doctors when navigating their fragmented, grossly unfair health system.

The second summarised the range of reports and reviews that have demonstrated that the NHS - at least the NHS as it was in 2011 - is fairer and, crucially, more efficient than many other health systems in the developed world, as well as seeing record levels of public satisfaction.

The third post highlighted the huge body of opposition from experts and professionals in the British health system against the Government's NHS & Social Care Bill.

Despite this evidence that the NHS was doing broadly well, despite the weight of opposition from the UK's leading experts, despite the countless examples of where the fragmented US system fails its people and despite the continuing public support for the service, the Government, aided shamefully by the Liberal Democrats, passed the reform bill which effectively started the wholesale privatisation of the institution. In time, it is likely that people will acknowledge this was the bill that ended the National Health Service as most of us know it.

The NHS, however, is just one area in which the government is rolling back the state. In the education sector, the Government has introduced Free Schools and weakened the role of Local Authorities, without pausing to see if evidence supports their lavish costs. It has slashed state funding for universities and indicated it is ready to go further an accept for-profit providers to take over schools

In criminal justice, the Government is privatising swathes of the police service, to add to extended privatisations of prisons and, most recently, has announced it is to outsource the bulk of the probation service - without a pilot. Companies such as G4S, which performed so abysmally during the Olympics, stand to gain handsomely.

In welfare, as well as slashing benefits to the poorest, it is ensuring that what payments remain are controlled and distributed by private companies - even those like A4E that make large profits while bending the rules in their favour. All the time these corporations are protected from the public scrutiny by exemptions from Freedom of Information requests, so the public has little idea of their costs or profit margins.

If the Government were being genuinely pragmatic - echoing Blair's mantra of "what matters is what works" - then where the private sector and privatisation fails it would seek alternatives, rather than pursuing a one-way street that identifies 'failures' in the state sector but ignores those made by profit-making companies. It would, for example, recognise the scandalous state of our railway system, with its rocketing fares, rather than nodding through whitewash reports

If the Coalition were interested in evidence-based policy, in welfare or criminal justice it would at least pause to consider whether companies like A4E or G4S are capable of running key public services effectively. After all, these aren't the kind of service people can opt out of - they are crucial to society. 

Instead, the only conclusion people can draw is that major companies can screw up completely and still get to gain from further outsourced contracts. Meanwhile, the government will shout loudly about scandal in the state sector, even where botched part-privatisations are arguably responsible, but refuse (as is the case with the probation service) to even pilot these further privatisations to assess their effectiveness.

The modern Tory Party, like their cousins across the Atlantic, increasingly tread a deeply ideological path: the state should be shrunk at all costs and the profit-motive is king. Everything else is secondary. In this version of reality, the financial crisis of 2008 wasn't caused by deregulated free market capitalism but by too many nurses, police officers and probation staff working in a 'bloated' state sector.

The truth is that this current Government has little interest in 'what works', in evidence-based analysis, in independent experts or professional views. What matters to this Government is that it knows that it is likely to lose the 2015 General Election, and that between now and then it will seek to privatise as many of the public services as possible. 

Tuesday, 8 January 2013

Homes for London campaign

Further to the last post on the disgraceful costs of renting or buying a home in London, Shelter's campaign  - Homes for London - is worth highlighting.

Aside from their valuable research into the astronomical costs of living in the capital, they are doing an excellent job at lobbying the Mayor and the Government.

Although it is unlikely that a Tory-dominated parliament or a Conservative Mayor would have much incentive to remedy a situation that is likely to make London are more Tory-dominated city, it is the work of charities like Shelter that keeps the issue in the media and on peoples' mind.

An earlier post on this blog collated some other shocking statistics about the woeful state London now finds itself in on this issue.

Monday, 7 January 2013

Rent and property prices in the capital are obscene - and its turning London into a city for the rich

Some statistics are so unbelievable that you have to read them again to check you've not misunderstood.

Take this one on private rent in London: The charity Shelter has found that in 5 London boroughs, average monthly rent for a 2-bed property is now 75% or more of local median take-home pay and in the majority of London boroughs median rents cost more than 50% of median local full-time earnings.

Meanwhile, in August 2012, the average price of privately renting a home reached its highest ever level, jumping 4.8% in a single year to hit £1,272 a month. In central boroughs the cost is even higher. And rents keep rising, driven by the equally unbelievable prices for London property. The average home in the capital now costs £397,000 – 70 per cent more than the UK average –  with the average price of a two-bedroom property at £483,000.

And yet this doesn't need to be the case. There are a number of factors that drive these costs that can, with political bravery, be tackled. Take two of the most toxic causes of property and rental price increases, the number of second - or third - homes in the capital and the influence of buy-to let landlords.

Second homes

Walk around a high-end part of a central London borough - near the King's Road in Chelsea for example, or Belgravia - on a weekend and you'll never cease to be surprised at how empty it can seem. This isn't necessarily your imagination. Camden Council found that 1 in 16 homes are left empty by their owners in their borough, as these aren't a 'home', but rather part of a larger property portfolio.

According to estate agent Savills, almost 60% of buyers in central London areas such as Kensington, Chelsea and Marylebone were from overseas and for 37% of these their London property is not their primary residence.

That the Government and the Mayor have nothing to say on this, other than commending multiple home owners for 'investing' in the capital isn't surprising: Conservatives have never, and will never, find much wrong with protecting the interests of the very wealthy. That it was a Labour government that allowed second home owners to have a tax break should be a source of shame for those in the Blair and Brown administrations.

A government could help make owning a second home in the capital less attractive and thus free up vital homes for those that need it. Denmark, like other continental European countries, has for many years taken the impact of multiple home owners on communities and the countryside very seriously indeed.

Buy-to-let landlords 

The effect of buy-to-let landlords is even more pernicious. The idea, supposedly, is that buy-to-let landlords lubricate the market, driving house building. And yet, despite last year seeing a staggering 15% rise in buy-to-let mortgage approvals, house building growth is moribund.

In other words, buy-to-let landlords are swallowing up vital housing stock that would otherwise be available for those looking to buy a home. And while first-time-buyers are saving for an average of eight years for their first home, not least to pay the huge deposits now required by mortgage lenders, those with large property portfolios can trade on record rental incomes to access these properties far faster.

A do-nothing Mayor

Despite a crisis of affordability, Boris Johnson currently presides over a city that has almost 200,000 homes with planning permission already granted that are currently in stalled developments. He also leads an administration elected on a ticket to water down requirements for property development schemes to have a minimum proportion of affordable housing. His only contribution to the situation is to push up the costs of public transport in London.

Where new properties are being built, they are frequently "prime residential" schemes aimed at the super-rich. These numbers of these kinds of property at planning or build stage rose 70% between 2011 and 2012.

As this blog has pointed out before, whereas his defeated opponent proposed a New York-style cap on private rents and a 'London Living Rent', on housing Boris offers - as one expert put it - nothing but the status quo

The situation is a disgrace. Whereas ordinary people who seek merely a home of their own to live in have to suffer seemingly ever-rising energy and transport costs while they save for a house, those with wealth and power can use the situation to enrich themselves, at the direct cost of everyone else.

Sunday, 6 January 2013

Leaving the EU isn't about standing up for Britain. It is about pushing Britain to the right

Here's a thought experiment:

Imagine if the centre of gravity of continental European politics wasn't situated to the left of ours? Instead of moderate centre-right parties (such as the Christian Democratic Union in Germany) competing with social democratic parties on the left for power, there would be right-wing free-market parties like the UK Tory Party dominating the landscape.

In this situation there would be fundamental difference with the policies of the European Union. Instead of a body producing a range of centrist and in some cases centre-left regulations - particularly around the environment  worker's rights and social protections - mixed with some centre-right policies, the EU would instead be a relentless deregulator and privatiser. It would seek to slash taxes, to remove social and environmental protections and thus remove the 'barries to wealth' that the right so often characterises these vital features of a civilised society.

In that situation, would Tory backbenchers and wealthy newspaper owners complain so bitterly about the EU? Would they campaign ad nauseum on the matter, even when every opinion poll says that the EU isn't anywhere near at the top of ordinary people's lists of concerns - not even for UKIP voters?

Of course not.


The problem those on the left have - and not just pro-Europeans - is that the right have been so successful at framing their arguments as being patriotic, particularly when it comes to Europe.

The has two profound benefits for the Conservatives. First, it allows them to harness at least some of the power of those voters that will mark a ballot for the party that they see as patriotic - in some cases voters that may be tempted to vote for more radical nationalist parties. Secondly, and more importantly, it allows right-wing parties to frame their opposition to policies created by the EU that they oppose on ideological grounds (improving parental leave rights, regulating food or medicine manufacturers, protecting natural habitats) as 'standing up for Britain'. They therefore manage to frame attacks on workers protections or social protections as being in the interests of the nation.

And it's a successful strategy, in part because polls have demonstrated that although the EU isn't an important issue to most British people, a policy that may be popular when named in isolation is seen in less favourable terms when associated with the EU. By framing opposition to these matters in patriotic terms allows the Tories to avoid admitting that their opposition is to the policies themselves.

There is a linguistic element here - that could be addressed in a completely different post- that demonstrates further the success of the right in framing their arguments. Ask someone, for example, if they think that 'red tape' is a good thing, and they'll invariably say no. However, explain that 'red tape' could be the law that stops their local factory pouring toxic chemicals into their drinking water, or the rules that prevent other people parking their cars right in front of their driveway, and they'll most likely express a different opinion.


The most depressing aspect of the success the Tories and their allies in the media have had in taking this line is that, on the whole, the modern neo-liberal right actually care little for British sovereignty, or British traditions. Witness their silence as iconic UK companies are taken over by foreign corporations. The Conservative Party of the mid-twentieth century arguably had an ideological tendency to preserve and protect, however misguidedly, their traditional view of Britain. However the takeover of the right from the 1980s onwards by the neo-liberals has created a different kind of Tory politics: one, like its more radical cousin in America, that seeks to gut the state at all costs and regardless of consequences for those that suffer as a result.

On both sides of the Atlantic, this ideology is increasingly quasi-religious in its ruthless opposition to anything that is seen as standing in opposition to an unfettered free market. Nothing, not universally accessible healthcare or national culture - takes precedence over the aim to deregulate.

Take the BBC. It is loathed by many on the right with an antipathy that is baffling to many. Not least the British public, which, despite recent troubles for the organisation, still sees it as by far the most trusted source of news. This is reflected in market research showing it is the most used news source on the internet by UK users. In terms of its cultural impact, it is huge, spending by far the highest proportion of money on original British content than any other broadcaster, whether on radio or TV.

Globally its importance to the UK is equally significant. It is the world's largest international broadcaster, with 44 foreign news bureaux. Its Global News division, including the World Service and BBC News, has a regular audience of over 230 million, making waves in even the smallest US towns. Services such BBC Monitoring are used by foreign news broadcasters across the world to support their output. Global polls show it is seen as the most trusted and objective news source.

Beyond news, its cultural impact is significant, with BBC comedies and dramas exported across Europe;  its documentaries, not least its world-renowned natural history unit, are known the world over. Its reach is extended through both BBC channels overseas and export deals to foreign broadcasters. From David Brent and Alan Partridge to David Attenborough and Brian Cox, its characters and presenters are recognised across the world.

In other words, the British Broadcasting Corporation does a huge job in increasing the soft power of the UK. It is popular and trusted across the globe. It does a better job at projecting British culture overseas than the Foreign & Commonwealth Office. Any political movement concerned with British sovereignty or culture would therefore seek to promote and protect such a unique organisation. But as the BBC commits the sin of being publicly-funded, the modern 'patriotic' right seeks to do the opposite - to destroy it. Better for them a US-dominated global news landscape and a dearth of UK-made programmes at home than the continued existence of an organisation that challenges their fundamentalist free-market worldview.

The simple fact is that when it comes down to a choice between protecting British culture and promoting the image of Britain overseas, or adhering to their economic ideology, the latter will always come out on top in today's Conservative Party.

Leaving the EU, then, isn't about standing up for Britain. It is about pushing Britain to the right. It is about removing the protections and regulations that, for millions, make their lives better, but for a minority at the very top, are seen as an inconvenience - a barrier to increasing their wealth yet further. To allow the Tory Party - and UKIP - to frame this debate in any other terms lets them pull of one of the greatest con tricks in modern politics.