‘Housing has become a commodity’: how investors reshaped London’s skyline and communities

Juliet Ferguson

The London skyline has changed dramatically over the last two decades. If the story of a city can be told through its architecture, nowhere is this better encapsulated than the view from the Golden Jubilee Bridges. Looking eastward, on the right bank of the Thames are the shining tower blocks of Canary Wharf and the City, on the left, the dome of St Paul’s Cathedral, once the tallest building in London, now dwarfed by its new neighbours. On the other side of the bridge, looking westwards, the still being built development of Nine Elms dominates the skyline- to the right the Palace of Westminster, home to the UK parliament. Both religion and democracy now stand in the shadow of money, where it’s made and where it’s spent.

Nine Elms, a once industrial, working-class area behind the (also recently redeveloped) Battersea Power Station, is only the latest in a decade of developments to attract the mega-rich and property investors. But at the same time as these developments have been springing up, a lot of social housing has been coming down. Despite promises to include ‘affordable’ or even ‘genuinely affordable’ homes, initial commitments – already insufficient to replace those lost – are often whittled away.

As well as luxury apartments in the Battersea Power Station development ‘386 affordable homes are being built’ according to the website. But this is considerably fewer than the 600-odd that were originally promised. Increased costs due to issues with the renovation of the power station were cited by the developer as a reason for having to reduce the number.

The local authority (Wandsworth) website talks of 20,000 new homes being built around Nine Elms. Of these up to 4,000 will be low cost housing schemes. But this is not enough, according to Andrea Gilbert from the Wandsworth Housing Action group. “We’ve got 11,000 people still waiting for a home. We have no inkling of when, or how long they’re going to be waiting,” she says.

Juliet Ferguson
The ‘New Neighbourhood’, part of the Battersea Power Station redevelopment project.

As for the properties sold at market rate, “nobody from the community are actually buying them,” Gilbert adds. “It’s foreign investors.”

A Wandsworth Council spokesperson told IE: “We are proposing a number of sensible policies that seek to support the most vulnerable in our society. Against this background we would have wished to see many more affordable homes, in particular social rent homes, at the Power Station.

“The council is seeking to increase affordable home delivery by working with developers, landowners and Registered Providers to deliver the maximum level of affordable housing within new developments, preferably 50% of all new homes in line with our emerging policies.”

A number of social housing estates, along with the occasional row of houses from the by-gone industrial days, sit uncomfortably alongside the shiny new tower blocks. While none of these estates are currently earmarked for redevelopment, residents must surely worry that same fate will befall them as has others that face demolition.

But for Matthew Corner, the councillor for the Nine Elms Ward, this is a success story; one of growth and innovation. And with two new tube stations, this is a part of London that’s now been put firmly on the map. In an article on the Conservative Home website, Cllr Corner wrote that Battersea Power Station had been crumbling away and abandoned for years. He added that the area around it and Nine Elms was just a decade ago “a derelict industrial wasteland” but has now been “transformed into a key part of the UK economy.”

Juliet Ferguson
Houses from the by-gone industrial days sit uncomfortably alongside shiny new developments across London.

The London Tenants Federation found that across London, over the last decade, just under 23,000 social-rented homes were demolished, while only 12,050 were built.

The demand for social housing is particularly high. In each borough there could be around “10,000  people who are waiting for a social housing tenancy and who really fit the profile of somebody who needs that kind of home”, according to Melanie Sirinathsingh, a communications and impact lead at Kineara, an organisation that supports vulnerable people with their housing needs.

Juliet Ferguson
Battersea and Nine Elms have seen a huge inflow of cash into real estate.

Suzanne Muna from the Social Housing Action Campaign has also seen big changes with increased investment from the City, as many housing associations change from being “primarily charitable organisations to being primarily commercial developers.” “It’s a very, very safe return and it has decent margins as well,” she explains.“And any investor will want to maximise their returns, unfortunately this is often at the expense of the resident. It’s far more profitable for housing associations to build for full market rents and sale.”

Dr Rex McKenzie, senior lecturer in economics at Kingston University, sees this as part of a bigger pattern. “What we see going on with houses is the tendency towards financialisation, where houses are not just a use value, they’re very much an exchange value as well,” he says.

Juliet Ferguson
One Hyde Park (known as the world’s most expensive residential building) is one of London’s most exclusive new addresses.

The spiritual home in London of oligarchs and the mega-rich is Knightsbridge, if you can find them at home that is; as many of these high-end properties are ‘buy to leave’. Left empty “in the expectation of asset appreciation, or simply as a ‘safe haven’ for capital”, according to the Action on Empty Homes group. A walk towards the river takes you past grand, stucco fronted houses where apartments sell for millions. After about 15-minutes the Cundy Street estate comes into view. Now boarded-up, despite a campaign by residents to save their community, it is awaiting the same fate as the nearby Ebury Estate, where demolition has already started.

Juliet Ferguson
The Cundy Street flats in Westminster are set to be demolished.

The 1950s Cundy Street flats with their distinctive curved balconies were a mixture of affordable and market rent accommodation. Walden House, part of the estate, was leased to Westminster Council for social housing. The land is owned by the Grosvenor Group (owned by Hugh Grosvenor, 7th Duke of Westminster and 12th on the Times Rich List), who plan to replace the blocks with luxury housing. The campaign group say this is just about ‘putting profit before people’.

Although residents lost the fight to stop demolition, they did win the right to be rehoused in new social housing on the site of their old homes.

But it’s not just the super-rich that look to property as an investment. Across town, Elephant and Castle – a previously neglected part of south London – is currently undergoing a major regeneration. Home to many of London’s Latin community, the now-demolished 1960s shopping centre had a large number of independent shops and traders that served the community. A group of local people – 35percent (so-named for the Council’s minimum policy requirement of 35% affordable housing) – have been campaigning for social housing and to preserve their community.

Juliet Ferguson
Regeneration in Elephant and Castle led to the demolition of a local shopping centre and the Heygate housing estate.

The campaign started with Heygate estate in Elephant and Castle which, along with its 1,194 social-rented flats was demolished in 2014. According to the Guardian, just 74 out of 2,500 new homes were social housing, while 500 are ‘affordable’. What’s less clear is who they’ll be affordable to. Transparency International found flats in South Gardens, where the Heygate estate once stood, ‘exclusively represented by a single firm, which specialises in international property investor purchases.’

Southwark Council did not respond to requests for comment. Instead, they shared a link to their website which describes “a 15 year, £4bn regeneration programme” that “will include a new shopping centre, a new entrance to the Underground, a new building for the London College of Communications and 979 new flats.”

Traders of the now demolished shopping centre will have the first option to apply for an offer affordable retail space at the new Elephant Park. So far, 45 traders have found an affordable relocation space in the new development.

Southwark Council say they have made it clear that the redevelopment should “build on the diversity of the Elephant and Castle and have provision for smaller, independent traders to operate from the new centre”.

For cash-strapped councils this can be a way of raising much needed money. “From the local authority’s point of view, a lot of what is going on is actually filling funding gaps,” Dr McKenzie says. “This is one way of getting resources into your city.”

And it’s not just the mega-rich. “I think there’s a bunch of middle class or upper middle-class people who are saving or using it for pension purposes,” McKenzie adds. “So, a lot of people are benefiting. But not the residents. Residents are talking about displacement. [They] feel a sense of loss and are pretty unhappy. But generally, everybody else just likes the rush of money that’s coming in from all over. There’s this kind of benign neglect of the place.”

Juliet Ferguson
The neighbourhood has attracted a large number of foreign real estate investors.

Jakob Miethe, visiting assistant professor at the University of California, Berkeley, looked into offshore property ownership and found that over 90% of real estate held from abroad in England is owned via secrecy jurisdictions, with “the largest part of it is Brits themselves. So, they round trip abroad and come back”. Holding investments offshore can be used as a way of reducing the tax bill, one of the key characteristics is secrecy, Miethe’s research relied heavily on leaked data about the foreign ownership of shell companies.

With the war in Ukraine, the UK government started to clamp down and sanctions put the brakes on Russian investment. The Economic Crime Bill currently going through in parliament aims to increase corporate transparency and therefore accountability, including the registration of overseas entities.

But Dr McKenzie isn’t optimistic, although the structures may be in place, as well as the framework to do something: “I am not sure about the political will to do anything about it. I think too many people will be damaged – personally damaged. In other words, I think this is in partvested interests of the political class.”

Sirinathsingh believes that “housing has become a commodity”, adding that “the idea of housing as a human right, as a home and as a shelter has really become secondary to housing as an investment, as a speculative investment.”

For Andrea Gilbert, the solution is simple: “They need to stop building unaffordable homes.”