Foreign-Owned Uk Property

Part of the debate – in the House of Commons at 5:00 pm on 20th June 2013.

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Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats 5:00 pm, 20th June 2013

That certainly appears to be the case. Let me give a constituency example. At the Elephant and Castle, just over the bridge, as people know, there is a controversial development of a former council estate, the Heygate estate, that is being done by Lend Lease, an Australian company. The first phase was either first put on the market in Malaysia or put on the market in Malaysia at the same time as it was advertised here. My constituents, who are desperate for the housing that was meant to replace the council estate, were more than angry to think that not only were they not getting the affordable housing they were promised at the promised levels but the property that was made available for private sale first was being block-bought off plan in Malaysia. This morning I went to look at an estate development in my constituency that has, I understand, been marketed principally in Thailand.

To show the other side of the coin, let me cite a second e-mail that I received unprompted in the past couple of days, entitled “Housing developers targeting foreign buyers”. It states:

“I am British and live in Singapore. Even though I have a work permit, the Government put an extra high stamp duty on property, and also restrict me from renting out a property I buy for the first three years of ownership.

I gather that the first phase of the Battersea development was out-sold in Singapore with over 800 units going to Singaporeans. The main reason is the devaluation of Sterling combined with the rising costs of housing in Singapore. Why buy a two bed in Singapore for £1 million sterling when you can buy two in London for £800,000?”

So in this country properties are increasingly being sold abroad and in other countries Governments are realising that they need to have some restrictions on the inward investment into their housing in order to look after their own people and ensure that they, or residents in these countries, who may not have been born there but have settled there, have opportunity in the market.

The Mayor of London this week produced a document “The greatest city on Earth: ambitions for London”. I share that view of London, as I think it is the greatest city on earth, and also the ambitions for it. I am hugely proud to be a London Member of Parliament and to represent my constituency. In the same month as that was produced, the Bureau of Investigative Journalism published an article headed “The housing crisis: Westminster hit by soaring costs as it struggles with homeless crisis”. Today’s Evening Standard headline is “Rough sleepers double in 5 years: Mayor under fire after pledge to eliminate problem”. It gives the explanation as follows:

“Experts said the increasing numbers were a consequence of housing benefit cuts, soaring rents and the closure of a dozen hostels and day centres”.

Soaring rents are absolutely one of the reasons why people cannot find homes that they need.

As hon. Members would imagine, a lot of work has been done in this area. I am grateful to Savills Residential, with which I have met. It produces regular reports and is about to do another one on who invests in this country, where and how. A very good report was produced by the Smith Institute in July 2012 entitled “London for sale? An assessment of the private housing market in London and the impact of growing overseas investment”. Deloitte produces an annual prediction and has just done so. Knight Frank has accurate, up-to-date figures, which I have looked at and drawn on.

I have also looked at other articles, with titles such as “More restrictions on foreign property buyers in Switzerland”, “Property purchases: who can purchase property in Denmark?”. The Danes have clearly thought that they need to address this problem. I have looked at other general assessments—for example, an article in April entitled “Buyers not wanted: restrictions on international property investors”. It stated:

“While the world’s investors are busy snapping up property in London, other countries are putting up barriers to foreign ownership”.

That is the backdrop to this. I want to say a word about the politics and then where we ought to go. I am very clear that the UK has prided itself always on its international connections. London is a great global city, and my wonderful constituency has been a destination and place of passage for people from all over the world for centuries. Nobody I know in public life, in my party or in my constituency, does not appreciate the contribution that foreign investment has made into our country in the past and will continue to make in the future. We have also historically prided ourselves on being a country based on the free market, from which UK citizens and residents can acquire interests abroad, and where non-UK citizens and residents, and companies registered outside the UK can acquire interest in property in this country. Most people know that many, if not most, of our leading companies now have foreign owners. I often raise the issue of Thames Water and its failure to pay adequate taxes, but it is, in effect, an Australian company and many of our other utilities are also run by foreign owners.

The reality is that my country, my city and my constituency are desperately short of homes. In particular, we are desperately short of homes to rent, for shared ownership and to buy at prices that are affordable to the average income earner or average family.