Foreign Investment Blamed For 'Safety Deposit Boxes In The Sky'

Rachel Holdsworth
By Rachel Holdsworth Last edited 47 months ago
Foreign Investment Blamed For 'Safety Deposit Boxes In The Sky'

Artist's impression of the Greenwich Peninsula development

The Guardian has uncovered figures showing that foreign investors own sites where 30,000 homes are due to be built in London.

Hong Kong-owned Knight Dragon is behind the Greenwich Peninsula development, where 10,000 homes will be built by 2019, out of 17,788 homes planned for Greenwich borough. In Hammersmith and Fulham, 73% of the planned homes are coming out of the pockets of foreign investors and the Malaysian-owned Battersea Power Station development pushes Wandsworth's foreign-backed building to 53% of its total.

We don't believe that where the money's coming from to finance construction is the problem. Are homes getting built that otherwise wouldn't have? Great. The problem comes if the homes being built aren't suitable for normal Londoners, if what's being built are luxury 'safety deposit boxes in the sky', as the Guardian article puts it. And sadly, that is largely what's happening, but it's not an automatic consequence of foreign companies building in London. We'd say it's rather a consequence of allowing the free market to run rampant over the capital's housing market.

Land prices here are exorbitant. If a development company — any development company — buys up a patch of land, it's going to need to build something more upmarket than your standard block that the likes of us can live in, simply to recoup costs and make a profit. That's unless it is a housing association with a duty to provide low cost housing, or is in receipt of government funds to do the same. If investing its own cash, a property company will go all-out for high returns. Capitalism, innit?

Over at the Greenwich peninsula, Knight Dragon managed to persuade the council to let it build the "affordable" housing tucked away to the south, away from the impressive river views that will command high prices on the private market. One 24-storey building, The Lighterman, is already sold out — we can safely assume off-plan to investors, attracted by the "Conran + Partners designed interiors". We can also safely assume that flats in The Fulmar, with its "private residents' roof terrace for glamorous evenings at home", and The Waterman, with its private cinema room, won't be on sale in your local estate agents' for £250k.

But will Wood Wharf, owned by the (currently, and technically, British) Canary Wharf Group, be any better? The Isle of Dogs development will create 3,610 new homes, of which 25% will be "affordable". But 25% of Greenwich Peninsula's housing will be "affordable", it's just that it'll all be concentrated in the crappier bits. Another safe assumption is that nobody on an average salary will be able to get near a flat in the Herzog & de Meuron 'Loofah Tower'. That's the problem. Not where the money's coming from.

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Last Updated 27 December 2014