ISLINGTON Council has just declared war on overseas investors. It has even coined a catchy little phrase, “buy-to-leave” investors, citing them as the cause of new homes standing empty. Under new proposals, under consultation until 30 January, owners of new builds will be unable to leave their homes empty for longer than three months or ultimately face jail sentences and repossession. This follows a misleading analysis, suggesting that 30 per cent of the 2,000 homes built in Islington since 2008 have nobody on the electoral roll and could therefore be empty.
No one disagrees that Islington has a problem. It is the most densely populated borough in the UK, with a massive housing crisis. And now the council has been charged with producing 1,264 new homes a year until 2025. This has only occurred once in the last 10 years and, according to Lorema Research, there have only been 2,760 completions in the last six years.
So the blame-game has already started and Islington Council is plumbing the depths.
For a start, its research into “buy-to-leave” takes pre-selected developments only. And then, out of these, ones that least prove its point are disqualified. The council also excludes affordable housing in each development, on the basis of making its analysis more representative – while of course that makes it far less so. However, even its flawed data, analysed fairly, finds that only 16 per cent of units have an “unexplained non-registration” on the electoral roll. This amounts to just 141 households over six years – hardly enough evidence to warrant such draconian measures.
Not only does Islington’s research shout waste of taxpayer’s money, but it misses one crucial point. Only UK citizens or those from the EU, Commonwealth or British Overseas Territories, are entitled to vote. In one fell swoop, not only are investors from South East Asia and the Middle East not properly identified, but so are the headline-grabbing oligarchs from Russia and expatriates from around the world, who may well own property, live and work in the UK.
This is before you even consider that nearly every investor buys property to rent out or use. The mythical creature, who buys just to see the market appreciate, simply does not exist. And do not forget, investors in the private rented sector in prime central London alone contribute £1.2bn to the economy each year, as well as keeping the Treasury afloat to the tune of a further £500m.
But this is not just about fighting foreign investors’ corner. It is about Islington facing up to the facts. Our research reveals that scores of empty homes are publicly-owned, and Islington is one of London’s worst culprits: 34.4 per cent of the borough’s empty stock is owned by the council and housing associations, compared with just 7 per cent for the country as a whole. A recent freedom of information request found that Islington apparently holds no electronic maps as to what land it owns or manages. It was not even able to provide a list.
Rather than making an ill-conceived attack on foreign investment, Islington should seek to develop more affordable housing, either by releasing more public sector land or by ensuring a bigger share within new developments. This is well within the council’s power. Let’s face it, one of the very developments used in its so-called research is Bezier Apartments, marketed at £1,608 per square foot. With the best will in the world, even if a flat here was repossessed and made available, it would neither be affordable for the local buying market or Generation Rent.
And if the council instead sends some ill-fated foreign investor away at the Queen’s Pleasure as punishment, it is going to do nothing to fill an empty home. Islington Council, think again.