by Daphne Liddle
A GIANT 50-storey circular block of flats, known as the Tower and looking like a huge AA battery, sits on the Thames South Bank at Vauxhall. It has become a symbol of the madness of capitalism in advanced decay after the Guardian newspaper last week revealed that more than 60 per cent of the 214 luxury apartments in it are owned by foreigners, bought as investments and not to live in. Around a quarter of the flats in it are owned by offshore tax-haven companies.
Meanwhile Londoners are increasingly being evicted from their more humble homes for being unable the pay the soaring rents that rise from day-to-day as house prices increase. The flats in the Tower sell for up to £51 million but average at £2.2 million.
Former Labour Deputy Prime Minister John Prescott has spoken out against this anomaly that is a product of the process of capitalism.
Owners of properties in the Tower include a billionaire Russian oligarch, the chair of a defunct Nigerian bank and a Kyrgyz vodka tycoon.
The Shadow Housing Minister, John Healey, said that the building had become “symbol of the housing crisis” that “fuels people’s anger and sense of injustice”.
Conservative MP Bob Blackman, who sits on the House of Commons Communities Select Committee that scrutinises housing policy, said the ownership of the five-storey penthouse by an oligarch who had not yet lived there was ridiculous.
Blackman said that it might now be time to consider a policy demanding buyers of British properties commit to living in Britain for more than 90 days a year.
A lot of the blame for this situation rests with Chancellor George Osborne, who has been fuelling a giant housing price bubble in order to attract these foreign investors and mask the true picture of the decline in Britain’s economy.
Osborne recently has been issuing dire warnings against the Brexit campaign that if Britain votes to leave the European Union, house prices will start to fall. But that is likely to happen sooner or later anyway because the prices have been massively artificially inflated.
This has meant that the vast majority of workers in this country, suffering from wage stagnation, have no hope of ever being able to buy a home and great difficulty finding one they can afford to rent.
For them, a fall in house prices would be very good news, though not so good for those who have just been able to buy and with big mortgages; they would face negative equity.
There are growing predictions of an inevitable house price crash and that is now driving investors away. Increasing numbers of buy-to-let landlords are now looking to sell before the value of their property falls.
Increasingly the people buying luxury property in London now are criminals. Graham Vanbergen from the economic discussion website truepublica.org.uk wrote: “Housing in many countries, especially Britain is no longer an investment; it’s now made up of three fundamentals: consumption, crime and concern. The general public getting on the bandwagon with cheap loans is consumption.
“The crime slot is taken now that over 40 per cent of Britain’s housing stock is bought in cash with property used as an international laundrette to wash hundreds of billions. And concern comes from savers who quite rightly think that the banks and Government will steal their hard earned (low or negative savings rates), tax paid money that drives a reluctant middle class into becoming landlords.
“Cheap loans will prevail but credit is drying up the world over. The criminals have stopped buying in over-heated Britain and even George Osborne, who has fuelled the bubble, is taking action against amateur landlords that make up the vast majority of property investors in Britain.”
Russia Today has reported: “Asian and Russian luxury homebuyers are deserting London’s property market amid economic uncertainty.” Property buyers from Asia made up 26 per cent of those buying homes in wealthy areas of London such as Kensington, Chelsea and Belgravia in the first three quarters of last year.
That figure has dropped to six per cent according to figures compiled by estate agent Hamptons for the Financial Times.According to Letting Agent Today: “Osborne has slashed rental sector confidence to below crisis levels.” Landlords’ confidence in the buy to let sector has collapsed to an all-time low and is now “worse than levels witnessed during the financial crash” according to a trade body. Richard Lambert, chief executive of the National Landlords Association, says confidence in landlords’ business expectations has tumbled by more than a third over the past year from 67 per cent to an all-time low of 43 per cent.