London’s Housing Crisis
The contributory factor of the housing crisis in London that is frequently underrepresented is the rising price of houses. Particularly of note is the prevalence of wealthy foreigners purchasing expansive homes and then leaving them unoccupied for long stretches of the year. The rise of such ‘ghost’ houses has taken place against the backdrop of severe shortages in affordable housing in the city. With average house prices surpassing £500,000 for the first time ever in 2021[1], London is rapidly becoming a commuter city, with people travelling hours from outside the city limits for work and going back. This leads to dead spots in the city and a depressing loss of the cultural diversity for which London is recognised globally. This is all in line with a decades long escalation in gentrification in the city centre. A prime example is the internationally revered area of Notting Hill. All the way through the 70s, 80s, and 90s it was a part of the city notorious for its rows of brightly painted houses, populated by eccentric artists and musicians — the streets were lined with exotic shops and food vendors. Nowadays, the cars in most of the driveways are covered in a thick layer of dust, the houses have all been painted a homogenous white, and the cheapest houses run all too easily into the millions of pounds range. This trend is fairly emblematic of many of London’s boroughs in recent years — such as the southern shore of the Thames near Battersea, where the recent $1 billion construction of the new US Embassy has been another step in a long series of mega construction projects, one of the most notable being the refurbishment of Battersea Power Station into pricey, luxury apartments. Nothing is perhaps more illustrative of these distressing trends, a former hub of production in industrial London now having flats starting at £510,000[2]. All of this results in a 62% decline in affordable housing[3] and a 141% increase in rough sleeping over the past decade[4]. The reasons for this coming about in London is not dissimilar from the same situations being observed in other major western, metropolitan cities — such as New York, Paris, Los Angeles. The city has grown hip and fashionable over the last few decades. As the internet grew and travel became cheaper, London quickly became the place to visit — Buckingham Palace, Michelin-starred restaurants, a thriving nightclub scene. London is regularly voted the best city in the world to live in[5]and as an increasing number of people have ludicrous sums to spend on their residences, they choose it as the place to put down their roots. Developers in London therefore have no shortage of demand, and with strict limits on new builds, supply remains low, skyrocketing prices while the local and global wealth gap grows ever bigger. There have been some attempts to keep this in check — some legislation has called for quotas of affordable housing to be imposed upon any new build contracts — but this has had its own issues, such as the (frequently minority) residents of said housing being segregated away. Promises of expanding affordable housing have been fixtures of the ruling party’s manifesto for several successive elections, and yet little change occurs. The issue here is that the only thing incentivising politicians to curb and regulate these issues is a vague sense of morality (ineffective in politics) and occasional public campaigns. Essentially, money talks. The allure of massive foreign investment remains too great to ignore, and if that means leaving the lights off in a growing number of the city’s homes, then that is a price that the only people who could feasibly stop these trends are willing to pay. Curbing this crisis would therefore be immensely challenging, but efforts can be taken, nonetheless. One viable strategy may be mandating occupancy of any recently purchased property for at least half a year for example. Additionally, legislation should incentivise and reduce barriers to constructing large, affordable housing projects — together with a general drive to constructing more, genuine affordable housing. Property and luxury taxes should be increased to disincentivise high-ticket purchases of mega homes.
