For some people, it’s Pavlovian: mention the housing crisis, and on they drone about how “Britain is full”; rents are high because asylum seekers are all given 12-bedroom Georgian piles in Hampstead after being smuggled through Calais; and Russians are buying up London, and that’s why you can’t afford a £1.2m penthouse opposite Tate Britain.
But it is possible to discuss housing without being xenophobic, pretty straightforwardly, by getting to the root of the problem – and sticking to facts.
Britain is not “full” and very little of the country is built upon. With an ageing demographic, we need our population to expand; and with birth rates declining, immigration will be key to propping up the economy, the NHS and the care industry.
Most asylum seekers live in housing contracted out to companies like G4S and Serco, and many of the properties are in poor condition, as the public accounts committee (PAC) has noted. Providing shelter for refugees should be a hallmark of any civilised society: actively wanting or expecting people to live in poor accommodation and conditions because they were born in a different country is repellent.
But the most pernicious and covert xenophobia in the housing debate concerns “foreign ownership”. The amount of overseas investment, particularly in the London housing market, is increasing. Empty towers owned by foreign money are also an issue, because they ramp up house prices and concentrate construction on luxury suites rather than family homes and flats for first-time buyers.
No homes should be empty when 100,000 children live in temporary accommodation and street homelessness is rising rapidly. That many properties are empty speaks to the fact that these are not homes and were never intended to be, but financial instruments: a way of placing a bet with huge returns and little risk.
The problem with housing being bought up by foreign investors is not their nationality: it’s where the money goes. The Panama Papers showed that people invest in housing, then sequester the profit in shell companies, avoiding Her Majesty’s Revenue and Customs. Foreign ownership of empty London flats is a problem not because Russian people owning property in London is a horrifiying idea – it’s a multicultural city, for crying out loud – but because the people buying properties through shady trusts in the Cayman Islands don’t pay so much as council tax on them.
This isn’t about foreigners – British people themselves have also been shown to be using these back-channels to avoid paying tax on housing. The problem resides in the way London property is treated as gold bricks on which not a penny of tax is paid in this country. The money remains foreign, but whether the actual owner of a property is foreign doesn’t matter.
Why is this an issue? Because foreign ownership and leaving homes empty demonstrate that housing attracts investment, implying social housing is an anachronism. A form of housing that doesn’t yield profit for an individual and instead reinvests rent into the local authority helps many people, not just the few.
The fact that the rent from council flats funds libraries and leisure centres instead of funding conspicuous consumption doesn’t matter to Conservatives – the destruction of social housing is ideological, not based on fiscal responsibility or common sense. If housing is viewed purely as an asset, the wealthy will continue to find ways to increase its value while refusing to pay more than the bare minimum of tax on capital gains. And that means social housing is facing a bigger threat than ever.
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