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Mayor must do more to stop London homes going to international investors

London Assembly Labour Housing Spokesperson Tom Copley today (Monday) challenged the Mayor of London Boris Johnson on his failure to prevent international investors buying up homes in new developments and exacerbating the capital’s growing housing crisis. With the Mayor set to meet representatives of the Battersea Power Station Development Company in Malaysia today, Mr Copley raised serious questions about the effectiveness of the Mayor’s ‘concordat’ with developers after reports that 539 properties from the iconic Battersea Power Station development were marketed for an intensive international ‘roadshow’ last month.

Mr Copley said that the roadshow, which included exhibitions in Paris, New York, Shanghai, Singapore, Hong Kong, Kuala Lumpur, Tokyo, Beijing, Doha and Milan, showed that the development has been priced and marketed for international clients and was “a millions miles from affordable to ordinary Londoners.”

The concordat between developers and the Mayor has been signed by 59 developers with a pledge that they would take steps to market their properties in the London and the UK first. Yet in a response to fellow London Assembly Member Nicky Gavron last month, the Mayor conceded that it was entirely “based on goodwill” and that he did not even monitor compliance.

According to figures from Savills, £7 billion of international money was spent on high-end London homes last year, with only 20% of prime property purchases being from the UK. Savills also estimated that two-thirds of these overseas purchases were by investors rather than owner-occupiers.

Speaking in an interview with New York's public radio in November the Mayor accepted that London’s property market was increasingly unaffordable to ordinary Londoners. He said: “'The success of London is having a weird effect of making it very hard for Londoners to afford to live there... In assets, there is no question that there is a steady impoverishment of the bourgeoisie and we need to address it.”

London Assembly Labour Group Spokesperson, Tom Copley AM, said:

“Even the Mayor now appears to accept that most Londoners are struggling to afford to live in the capital. Despite many calls for action to stop developers prioritising properties for sale abroad, many new developments continue to price and market homes to attract international investors rather than ordinary Londoners.

“Boris Johnson has done very little to stop new properties from being priced and marketed for foreign investors. The fact the Mayor’s toothless ‘concordat’ is purely based on goodwill and not even monitored shows it’s hardly worth the paper it’s written on. As it stands the price of homes in major new developments is often a millions miles from affordable to ordinary Londoners.

“The cost of the average London home has risen by £162,000 since Boris Johnson became Mayor in 2008. Part of that increase is down to international investors pushing up prices, leaving first time buyers increasingly priced out of the market."

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