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2nd August, 2017

UK Housing Shortage

The Grenfell Tower fire has brought into sharp focus the shortage of housing in the UK, and the number of properties owned, yet not occupied by overseas clients and this has provided a feeding frenzy for the deluded Marxists and Communists who want the properties ripped from them, and  handed to the Grenfell tenants, or to anyone that they deem to be deserving i.e. if they are likely to vote for the Labour Party.

Our hearts go out to those who have been caught up in this terrible tragedy, without any bias or pre-judgement about their circumstances or legal status, and we despair at the lack of progress which has overtaken the efforts to re-home those affected - we cast no aspersion nor blame to anyone related to the fire or subsequent events - we prefer to wait for the outcome of the Police Criminal Investigation.

Unfortunately, the actions of the Labour Party - to call for the takeover the properties of others because they are better off financially, was a symbolic gesture of good old class envy, which was fueled by the Left for their own political ends, rather than a suitable arrangement for the tenants themselves.

Far worse, and the defining political moment, was when the Labour Party, represented by Corbyn and McDonnell showed how they really felt about those tenants - not by stirring up class hatred, but by using the tenants as pawns, as an excuse for them to attempt to grab power from an elected government, by fomenting insurrection on the basis of false claims of culpability in the fire. In the melee following the fire, Corbyn's little Red Army (Momentum) allegedly continued to stoke antipathy between the residents and the the local authorities, seeking to further the ambitions of the Labour Party under Corbyn - although they seem to have been a bit less active lately though, no doubt working behind the scenes in readiness for the Autumn  Conference Season.

How Many Properties are Foreign owned in the UK?

We found two articles, by Jim Edwards, September, 2015, and, the former states that  "Londoners are not bidding against each other for houses. They are bidding against all of the world's rich people and the shell corporations they control." ​They also quoted the BBC who had established that there were more that 100,000 UK property titles registered to overseas companies and 36,000 properties in London owned by foreign firms, together they are worth some £122 billion.

Whilst it may occasionally be the case that an ordinary Londoner would be competing with foreign owners for properties in certain parts of London, the reality is that most Londoners would not have the money to be able to compete on multi-million pound properties.  So the real competition would be amongst the more well off who could afford a London home in any event, certainly not competing with the the ordinary man in the street or the unskilled labourer from the EU.

How many Second Homes  in the UK?

According to the BBC, ​in the 2011 Census, "1,570,228 people in England and Wales said they had a second address in England and Wales outside the local authority of their primary residence, that they used for 30 days or more each year. Another 47,733 of those people had second addresses in Scotland or Northern Ireland, while 820,814 had second addresses outside the UK. Only 11% of these people, or 165,095 of them, are classified as having these second addresses as holiday homes"

From an English Housing Survey (2012-13) - "671,000 households had a second home that they were not renting out to other people as their main residence."

"According to the Department for Communities and Local Government, there are approaching 28 million dwellings in the UK, so clearly a very small proportion of them are second homes."  Reality Check: How many people have second homes? By Anthony Reuben Head of statistics, BBC News 21 April 2015

As pointed out above out of the total 28 million dwellings in the UK, the number of second homes is only a small portion, and so, it appears is foreign ownership - it is worth noting that the 2017 Conservative manifesto committed to building 250,000 homes a year by 2021. One aspect of the changing demographic includes the changing in the number of available houses when people emigrate from the UK - those who emigrate may own property which then becomes available for immigrant, others will simply be replaced as renters. Social housing though is most affected by the influx of refugees, single homeless families, with long waiting list for the available stock for those considered to have a lower housing priority - but as the Labour MP Rachael Maskell pointed out (September, 2015) for those on the lower housing priority "It doesn't matter if the British have to wait longer for a GP appointment or there are fewer school places, we should keep on taking refugees until the system breaks." - as long as they are likely to vote for the Labour Party.

So with not that much foreign ownership, relatively speaking, and no large proportion of second homes, including the MPs second homes - UK house price inflation is likely to be down to the population increase from the EU, and elsewhere - which follows the same trend as population increase (Natwest house prices versus ONS Population statistics), since at least 2004. Competition for housing  is most likely between each other, and with the indigenous population for the existing stock - with additional factors, such as buy to let (diminishing effect after loss of tax breaks), low interest rates and "herd instinct" price escalation. But not related to foreign ownership or second home ownership reducing the available housing stock per say, particularly, since anyone with a mortgage is likely to make their stock available  - though as more properties are built the situation will change.

One final note, there have been reports about poor build quality in new housing stock, and opportunist land owners maintaining the freehold of the land and selling the houses with increasing, yearly ground rents, so it is still  a "wild west" in the housing market, and likely to get much worse with open borders.