The London Skyscraper That Is A Stark Symbol Of The Housing Crisis

[Saving For a Space Ship]

The London skyscraper that is a stark symbol of the housing crisis

http://www.theguardian.com/society/2016/may/24/revealed-foreign-buyers-own-two-thirds-of-tower-st-george-wharf-london?CMP=share_btn_tw

A Russian billionaire whose business partner is a close ally of Vladimir Putin, the former chairman of a defunct Nigerian bank and a Kyrgyz vodka tycoon appear to be among more than 130 foreign buyers in Britain’s tallest residential skyscraper.

Almost two-thirds of homes in the Tower, a 50-storey apartment complex inLondon, are in foreign ownership, with a quarter held through secretive offshore companies based in tax havens, a Guardian investigation has revealed.

The revelations about the Tower are likely to be seized on by campaigners and politicians as the starkest example yet of the housing crisis gripping the capital, in which too many new homes are sold abroad as investments and left largely empty.

The first residents of the landmark development arrived in October 2013, but many of the homes are barely occupied, with some residents saying they only use them for a fraction of the year......

Edited May 25, 2016 by Saving For a Space Ship

[billybong]

It only tells us what we already knew, our main export is housing to the worlds wealthy and corrupt while shafting our own citizens.

+1

[iamnumerate]

It only tells us what we already knew, our main export is housing to the worlds wealthy and corrupt while shafting our own citizens.

If we built more homes (and didn't pay for people who don't need to live in London to do so). Building homes for foreigners to invest in would be a very bad investment because we would just build more and more (like Spain) until prices crash. Sadly we don't do that.

[Amiinsane]

The corrupt filth of the world allowed to use London as their money-laundering operation while the people who live and work here struggle to find somewhere to live.

Tells you all you need to know about this government that they're doing absolutely nothing about it. We're basically living in a banana republic by proxy.

[winkie]

[billybong]

Almost two-thirds of homes in the Tower, a 50-storey apartment complex inLondon, are in foreign ownership, with a quarter held through secretive offshore companies based in tax havens, a Guardian investigation has revealed.

http://order-order.com/2016/04/04/media-organisations-using-offshore-havens/

It is worth mentioning that most of the UK’s big media organisations shelter assets and cash flows offshore. Top of the hypocrites in this respect is The Guardian. They put their assets in the Caymans, and they used a Luxembourg tax shell designed by PriceWaterhouseCoopers to funnel cash flows beyond the reach of HMRC.

Edited May 25, 2016 by billybong

[thewig]

These speculative stores of wealth will crash the hardest IMO. Those furthest detached from their fundamental utility, ie as a PLACE TO F**KING LIVE will crash the best. It's gonna be beautiful if you are one of those (as I am) who have been watching the insanity ramp up exponentially the past twenty years.

[EssKay]

These speculative stores of wealth will crash the hardest IMO. Those furthest detached from their fundamental utility, ie as a PLACE TO F**KING LIVE will crash the best. It's gonna be beautiful if you are one of those (as I am) who have been watching the insanity ramp up exponentially the past twenty years.

I'm not so sure they will - at least not in the long term in places like London anyway. Remember this isn't a mining town in Australia or a golf resort town in Spain, it is a playground for the global elite. Very few other places like it around the world (New York, Dubai, Paris)

The fundamental problem is fiat money. That is why we are seeing insane speculation in all kinds of assets (seen the price of top marque classic cars or art?)

I suspect we will see a short term crash but when the dust settles, prime London will still be selling for insane prices per sq foot.

Edited May 25, 2016 by EssKay

[dgul]

This could be readily resolved by having progressive property taxes - at the moment the maximum holding tax (council tax) of an investment flat in London is about £2000 a year. Compare this to New York, where property tax is about 0.8% of value, or San Francisco at over 1%. Property tax at about 1% wouldn't make too much difference to most people, but the £500k a year it would cost to keep the penthouse in that high-rise block might at least bring the cost of hiding cash in the form of London apartments into line with other favoured areas to hide cash.

Edited May 25, 2016 by dgul

[Lord D'arcy Pew]

The London Skyscraper That Is A Stark Symbol Of The Housing Crisis Government Policy.

[HovelinHove]

I'm not so sure they will - at least not in the long term in places like London anyway. Remember this isn't a mining town in Australia or a golf resort town in Spain, it is a playground for the global elite. Very few other places like it around the world (New York, Dubai, Paris)

The fundamental problem is fiat money. That is why we are seeing insane speculation in all kinds of assets (seen the price of top marque classic cars or art?)

I suspect we will see a short term crash but when the dust settles, prime London will still be selling for insane prices per sq foot.

I agree with you to a point. Auckland, Sydney and Vancouver are more vulnerable in that respect. In those markets foreign wealth is the largest driver in price growth with very little in the way of other underlying economic fundamentals to support the growth. London's monster is multi-factorial given its status as a global financial and cultural hub. However, if these foreigners need to sell in a rush, and that is combined with wider market weakness, and asset devaluations, then this could help accelerate a crash in London.

[EssKay]

However, if these foreigners need to sell in a rush, and that is combined with wider market weakness, and asset devaluations, then this could help accelerate a crash in London.

Yep - agree it could get very nasty for anyone stupid enough to be heavily leveraged going into a crash. How much of prime London falls into that category though? This skyscraper for example will be pretty much all cash buyers hiding their ill gotten gains.

@dgul - higher property taxes at the top end would definitely help calm things down. Maybe the new labour mayor will be brave enough to do that?

[winkie]

[Amiinsane]

This could be readily resolved by having progressive property taxes - at the moment the maximum holding tax (council tax) of an investment flat in London is about £2000 a year. Compare this to New York, where property tax is about 0.8% of value, or San Francisco at over 1%. Property tax at about 1% wouldn't make too much difference to most people, but the £500k a year it would cost to keep the penthouse in that high-rise block might at least bring the cost of hiding cash in the form of London apartments into line with other favoured areas to hide cash.

For a government that claims to have a deficit to close they don't seem keen on free money. I'd be taxing the hell out of all these offshore owners, they bring nothing to the economy. But then I'm not friends with them or in their pocket like some in power.

[steve99]

The corrupt filth of the world allowed to use London as their money-laundering operation while the people who live and work here struggle to find somewhere to live.

Tells you all you need to know about this government that they're doing absolutely nothing about it. We're basically living in a banana republic by proxy.

Back in the 80's when the Tories were collaborating with the 'City' in order to put the working class back in their box (ie deleting unions and unionised industries) they saw 'City' wheeling and dealing in all its miserable forms as being the way of the future.. How right their prophesy and ambition was, and here we are, the money laundering capital of the world.

[PopGun]

Back in the 80's when the Tories were collaborating with the 'City' in order to put the working class back in their box (ie deleting unions and unionised industries) they saw 'City' wheeling and dealing in all its miserable forms as being the way of the future.. How right their prophesy and ambition was, and here we are, the money laundering capital of the world.

+1

[Tempus]

A brilliant piece on this by Simon Jenkins http://www.theguardian.com/commentisfree/2016/may/25/london-empty-towers-very-british-corruption-tainted-wealth

"Livingstone and Johnson promoted these towers not because they cared where ordinary Londoners would live, or because they had a coherent vision of how a historic city should look in the 21st century. They knew they were planning “dead” speculations, because plenty of people told them so. They went ahead because powerful men with money and a gift for flattery just asked. It was very British sort of corruption.

The appearance of these structures on the London horizon must rank as the saddest episode in the city’s recent history. We must live with them forever. But we shall not forget their facilitators."

[Trampa501]

I realise the two may not be disconnected, but I find a price tag of 400,000 for a pokey room outside central London, the real horror.

[billybong]

A brilliant piece on this by Simon Jenkins http://www.theguardian.com/commentisfree/2016/may/25/london-empty-towers-very-british-corruption-tainted-wealth

"Livingstone and Johnson promoted these towers not because they cared where ordinary Londoners would live, or because they had a coherent vision of how a historic city should look in the 21st century. They knew they were planning “dead” speculations, because plenty of people told them so. They went ahead because powerful men with money and a gift for flattery just asked. It was very British sort of corruption.

The appearance of these structures on the London horizon must rank as the saddest episode in the city’s recent history. We must live with them forever. But we shall not forget their facilitators."

So they did it just because they were asked by powerful and rich man and were flattered - that's all. A likely story. I believe it but thousands wouldn't

Amazing if that's all there is to it.

Edited May 27, 2016 by billybong

[billybong]

^ guardian link

Most cities, ironically including Hong Kong and Singapore, in some way restrict foreign or non-resident acquisition of property, as do most New York condominiums. In London gullible politicians and venal architects have conspired to suborn a great city, simply because towers seemed vaguely macho and money smells sweet.

Yeah "gullible" politicians.

Edited May 27, 2016 by billybong

[billybong]

^ guardian link

Next to Battersea power station is a crowded over-development on an almost Hong Kong scale, named Malaysia Square and aimed at the Asian super-rich. Johnson helped sell it in 2014 by actually unveiling the development not in London but in Kuala Lumpur. It will probably go bust and end up as slums. At least doctors, nurses, other professionals and the rest of the poor may one day live there.

Edited May 27, 2016 by billybong

[billybong]

A brilliant piece on this by Simon Jenkins http://www.theguardian.com/commentisfree/2016/may/25/london-empty-towers-very-british-corruption-tainted-wealth

"Livingstone and Johnson promoted these towers not because they cared where ordinary Londoners would live, or because they had a coherent vision of how a historic city should look in the 21st century. They knew they were planning “dead” speculations, because plenty of people told them so. They went ahead because powerful men with money and a gift for flattery just asked. It was very British sort of corruption.

The appearance of these structures on the London horizon must rank as the saddest episode in the city’s recent history. We must live with them forever. But we shall not forget their facilitators."

Interesting and it's also interesting that Jenkins didn't draw attention to the similarity of London's economy to the Chinese economy where they are also building masses of empty properties.

Edited May 27, 2016 by billybong

[Mrs Bear]

The corrupt filth of the world allowed to use London as their money-laundering operation while the people who live and work here struggle to find somewhere to live.

Tells you all you need to know about this government that they're doing absolutely nothing about it. We're basically living in a banana republic by proxy.

And neither did the last Labour government. On the contrary, they welcomed all these lovely rich people since there would be a 'trickle down' effect - remember that quaint promise from the Bliarites? Edited May 27, 2016 by Mrs Bear

[Peter Hun]

I travel past and along Nine Elms every day to work. Some of the new buildings are remarkably ugly.

However, I hope they stay empty, the thought of the occupants of 20,000 apartments trying to enter Vauxhall tube station when its already rammed fills me with dread. The next staion along is Victoria, the effect there will be catrostrophic.

Nine Elms will be a shit place to buy an apartment, even if they weren't twice the price of the rest of Battersea.

Edited May 28, 2016 by Peter Hun

[Ah-so]

And neither did the last Labour government. On the contrary, they welcomed all these lovely rich people since there would be a 'trickle down' effect - remember that quaint promise from the Bliarites?

I agree with your sentiment, but would challenge that Blair ever openly supported any 'trickle down' effect. There are many critics of "trickle down" economics, and strangely given this, there are almost no known proponents.