Wealth investment in London Homes and its impact on access to housing:

This project looks at homes in London which aren't housing anyone.

The headline when this strand of work began was 'buy to leave', but the wider reality we uncovered is the impact of wealth investment on the London property market at a time of a deepening housing crisis. The project is supported by Trust for London and aims to start a public conversation about how wealth investment distorts London housing delivery, creating a housing market that does not meet Londoners' housing needs.

Phase one of the project assessed impacts of wealth investment and advocated for those impacted by it. The project's first publication was published in January 2020 and presented the major issue in it's title, 'Homes Without Residents'. The publication also looked at how the issue was being addressed in cities around the world.

Subsequent publication 'Pretty Vacant' (2020) outlined our findings in London and advocated for change. This publication also identified the role of London's dominant development model in 'building-in emptiness' and locking Londoners out of access to decent and genuinely affordable housing.

A second phase worked with local campaigners in boroughs across London, to build a wider coalition to campaign at local and pan-London level. The Coalition Against Empty Homes grew out of this, alongside policy recommendations to influence the platforms of those standing as elected representatives.

Publication 'Nobody's Home' (2021) drew attention to the negative impacts of emptiness and underutilisation in London housing, at a time when numbers of London households placed in Temporary Accommodation continued to grow alongside levels of emptiness and underutilisation.

The publication also provided a platform to launch the wider Coalition of organisations arguing for change through the Campaign Against Empty Homes.

The current third phase of the project seeks to establish what Londoners are looking for in a fairer development model to replace the current failed model of housing delivery. We  aim to build on the insights gained in earlier phases of work to underline why this is vitally necessary; to avoid London continuing to build emptiness into its housing delivery and failing to meet the needs of those locked out of decent and genuinely affordable housing in the capital.

The questions we are interested in addressing are:

What do we know about wealth investment in the London property market?

Is wealth investment adding to the housing crisis?

How does wealth investment affect what gets built and for whom?

How does wealth investment suck housing out of London residential supply?

What policy approaches should be taken to the matter?

The initial project aimed to develop policy proposals about wealth investment in London property that would feed into upcoming GLA elections and Mayoral campaigns.

This has now developed through subsequent work into an examination of what communities believe that a 'fair development model' for London should deliver.

The project is funded by Trust for London.

Across the project's three stages we have looked to housing policymakers, campaigners, community organisations, elected representatives, members of London's homeless community and housing academics, as well as housing NGOs and thinktanks, to give us their views about how London and its local government bodies should approach the issue; including in relation to lobbying for changes to national Government policy.

Among the possible forms of wealth investment we look at are:

  1. High-end so-called 'buy to leave' investment. Properties developed purely as a store of wealth by global wealth investors. Properties left empty to maintain resale value over time in the expectation of asset appreciation, or simply as a 'safe haven' for capital, whether legitimate or illicit.
  2. Second-home investments. There are over 48,000 thousand notional 'second homes' in London recorded in Government data. Many may be either unoccupied wealth stores or empty homes re-categorised. Some could be short-term rental investments. There is a significant grey area between 'empty home' and 'second home' categories allowing for both tax avoidance and evasion. One London local authority has even stopped reporting second home numbers to the Government Dept of Levelling Up Homes and Communities (DLUHC). This undermines the validity of London and national data and of policy-making based upon it. A point acknowledged by civil servants in conversations with Action on Empty Homes.
  3. The blight of Airbnb-style rental in the capital. It is estimated that at least 50,000 entire homes in London are being advertised for short-term Airbnb-style rental. On Airbnb alone, there are as many as 75,000 London lettings advertised, with over half being whole homes, while several other platforms for such rentals exist. London is reported to have the largest short-term rental market of any European city and London Councils has suggested the impact may mean that short-lets are sucking as many as 1 home in every 50 out of residential use in London.

Interrogating new and existing data sources:

Work with academics and researchers as part of this project

As part of the first stage of this project, Action on Empty Homes researcher Chujan Sivathasan worked with data put together by Jonathan Bourne of University College London who has created a dataset based on Freedom of Information requests allowing us to look at underutilised property in relation to factors such as deprivation. 

Empty homes in England above all tell a story of inequality, Chujan's research shows how in London this can be represented through buy-to-leave in high-value areas as a form of 'high value residualisation', in which property purchased for its investment value is sucked out of residential supply; just as in low-value housing markets we can see absentee landlords and investors creating low-value residualisation, which can also result in high levels of empty homes, which are similarly sucked out of residential supply. These are in many ways two sides of the same coin in our national housing crisis.

An initial look at one of London's most unequal boroughs, the Royal Borough of Kensington and Chelsea, which featured the highest levels of both empty homes and second homes in the capital illustrated this point graphically and also referenced the work of Rex McKenzie of Kingston University on global wealth chains. Read Chujan's blog here.