Buy to Leave and Wealth investment in London Homes:

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

The headline is 'buy to leave', the wider reality 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. The project's first publication (published January 2020) presents the major issue in it's title, 'Homes Without Residents', and looks at how the issue is being addressed in cities around the world.

Subsequent publications 'Pretty Vacant' (2020) and 'Nobody's Home' (2021) have identified the role of London's dominant development model in building emptiness and locking Londoners out of access to decent affordable housing.

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 supply out of London residential delivery?

What policy approaches should be taken to the matter?

The project aims to develop a publication about wealth investment in London property that can be fed into the upcoming GLA elections and Mayoral campaign. The project is funded by Trust for London.

We are looking to housing policymakers, campaigners, elected representatives, members of London's homeless community, housing academics as well as housing NGOs and thinktanks to give us their views about how the GLA Mayor should approach the issue.

Among the possible forms of wealth investment we will be looking at are:

  1. High-end so-called 'buy to leave' investment. Properties developed purely as a store of wealth by global wealth investors. Properties are left empty to maintain resale value over time in the expectation of asset appreciation.
  2. Second-home investments. There are 46,000 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 Ministry of Housing Communities and Local Government or MHCLG. This undermines the validity of London and national data and of policy-making based upon it. A point acknowledged by civil servants in recent conversations with Action on Empty Homes.
  3. The blight of Airbnb style rental in the capital. It is estimated 50,000 entire homes in London are being advertised for short-term Airbnb-style rental. On Airbnb alone, there are 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.

As part of this project, Action on Empty Homes researcher Chujan Sivathasan has been working with data put together by Jonathan Bourne of University College London which creates a dataset based on Freedom of Information requests allowing us to look at under-utilised 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 features the highest levels of both empty homes and second homes in the capital illustrates this point graphically and also references the work of Rex Atkinson of Kingston University on global wealth chains. Read Chujan's blog here

As part of this project we have published a document looking at the impact of wealth investment on housing in London. This document, entitled Homes Without Residents' (Jan 2020), includes case studies from around the globe, demonstrating different policy approaches.