The Fairview homes development at Hampden Rd is being marketed to wealthy foreigners as student accommodation and would only be available for Londoners to rent. Fourteen units from the first phase have already been sold in Dubai and Hong Kong. Attached is the brochure, make your own minds up.
Oh my! So that also explains the difference in price between a one bed there (off plan) and a one bed at Woodberry Down (a few years old). Help to buy means the price for the person purchasing off plan can be higher but they immediately lose this if they turn around and sell it to someone who doesn't have help to buy. So help to buy is really a subsidy for the developers. Nice!
It always was. I called it "Help to keep Baby Boomers Happy" as they really can't face the idea that their property is overvalued and the market should be allowed to correct.
That's why the St Anne's Police station development has the 2 tiniest flats priced at exactly the maximum offered under Help to Buy. This has been a pattern repeated across London. HDV would have been this all over.
But that's so stupid of the government to do as they have a large equity stake in the property. As soon as it's purchased it goes down in value by 10%. I guess that's a lot of faith in the property market continuing to rise.
Rising property value is their core interest. It is what underpins the UK banking system.
The Home Truths series from Unherd is quite an interesting read on how the entwined policies and interest work currently and the myths around such issues as building density.
It's really quite simple - residential mortgage lending is the single largest line of credit in the UK financial industry - approx. £1.4 trillion. Larger than all sterling denominated corporate debt and only rivalled by government debt...
Add to this the fact that housing equity is the 2nd largest asset in UK household wealth (approx. 4tn - nearly as large as all pension wealth) and one can see the importance of the housing market to the UK economy and subsequently to individual wealth.
There is no such thing as an overvalued property - on aggregate in the UK. It's very well known that there is a massive divide between supply and demand, so targeted moans on a case by case basis don't prove that any of these properties are overvalued... or that foreign buyers are driving up prices - see latest price movements in north of England...
That's always been the case though. Ten years ago a one bed in the New River was about half the price of a house on the ladder.
If you look at the floor plans you'll see that the one bed is a bit bigger than half of the size of the house so on a square footage basis it's fairly reasonable.
These flats are being marketed in Hong Kong and if they are aimed at Mainland Chinese buyers, as I suspect, help to buy or even the vagaries of the market are of little relevance. They just need somewhere to park their funny money.
It's not all funny money, they're big savers and are allowed to invest their savings in residential property in London. I have a SIPP for my pension and the ONE asset I am not allowed in it is residential property, lest it cause unnecessary house price inflation...
Ditto - what exactly is your issue with money earned and saved by foreigners? We live in a global world where individuals and institutions are free to invest where possible.
Geraldine, I would challenge you to allocate 100% of your savings in UK assets or companies without any dealings outside the UK if you are so adamantly opposed to foreign investment.
In Hong Kong they have tax rates of 15%, is it really fair that they are allowed to buy HOUSES here in London and RENT THEM to Londoners?
I am not opposed to foreign investment but should houses be investments? I don't think so.
Well said, John McMullan. I too am not opposed to foreign investment per se but mainland property investors have pushed our market through the roof. Apartments now cost around 19 times gross annual median income so that no ordinary citizen is able to contemplate ever owning their own home. Property investment from Mainland China, here in Hong Kong, is deemed to be from overseas, much as that may confuse.
Here is an article from our local press that may interest readers:
Geraldine, let me help you on this. Foreign investors have nothing to do with this. There is solid statistical proof that housing inflation in the UK over the last 25 years has been driven by the following 4 factors, in order of impact:
- Real income growth
- Interest rate decrease
- Decline in housing supply
- Population Growth (including migration)