Scottish Land Commission publish discussion paper about diversifying land ownership

From Photochrom Prints Collection at the Library of Congress – Picture in the public domain

Scotland, as many know, is quite a few years ahead of England with land reform.

The Scottish Land Commission has just published a discussion paper by Peter Peacock about diversifying land ownership which is our recommended reading this week!

https://landcommission.gov.scot/wp-content/uploads/2018/03/Land-Lines-Land-Ownership-Peter-Peacock-March-2018.pdf

Promo video for The Landlord’s Game

THE LANDLORD’S GAME: a tour of London’s land and housing crisis. Please share this wicked promo video via facebook or youtube and then come along on Saturday 14th April, Mayfair!

Facebook event page – https://www.facebook.com/events/154637835243225/

The impact of overseas corruption on the London property market

A summary of Faulty Towers: Understanding the impact of overseas corruption on the London property market by Transparency International UK (2018)

As well as providing homes, the UK property market has long been recognised for providing a reliable investment opportunity. Whilst much of this investment will be from genuine investors seeking a steady income, there is now substantial evidence to show that:

‘UK real estate, particularly in London, is attracting corrupt officials and businesspeople who have stolen money from some of the most impoverished and repressed countries in the world’ (p4).

Since 2015, Transparency International UK (TI UK) has been examining the potential impact this illicit wealth might be having on London through surveying Londoners and analysing open source data such as the Panama Papers, articles by investigative journalists and Land Registry data. In so doing, they reveal how people launder stolen money into the property market, often through the use of ‘anonymous’ companies registered overseas. These organisations cannot be found on a public register and leave few paper trails, allowing their owners to enjoy their gains without scrutiny.

The London housing crisis

In London, house price rises consistently outstrip wage increases, dozens of prospective buyers compete for a shrinking pool of affordable stock whilst rent prices rise ever higher. As a consequence, it is becoming more difficult to afford to stay in London for average people, with the Government admitting the UK housing system was ‘broken’ in February 2017.

Overseas investment is just one of a range of factors that may be driving the crisis. Others include the lack of social housing, increased domestic demand and the shortage of development land. But TI UK’s report reveals that corruption overseas is also likely to play a significant contributory role, albeit in some slightly unexpected ways.

Understanding overseas investment into property

A significant amount of illicit investment into the property market stems from individuals buying homes to launder corrupt funds to conceal its criminal origins. This cleanses large amounts of illicit wealth in a single transaction and provides the individual with a valuable asset. London property retains value and often offers almost certain profit, with prices rising even amidst uncertainty over Brexit in early 2016.14

Corrupt individuals also buy homes in London because they provide a bolt hole in case they fall out of favour in their home country. Buying mansions in sought after areas of London or in exclusive new build developments comes with status, helping corrupt individuals distance themselves further from past corruption offences a practice which can be described as ‘reputation laundering’.

Key findings

The London property market is highly vulnerable to corrupt wealth flowing into it. Analysis of open source material found over £4.2 billion worth of properties bought with suspicious wealth.

Corruption causes high levels of instability abroad leading to ‘crisis capital’ being placed in safe havens like London. Since 2006 around £100 billion of hidden inflows have entered the UK.

House prices are affected as illicit wealth and crisis capital entering the UK increase demand in the London housing market, particularly at the top-end; ‘the ripple effects they generate resonate across London’,

New build developments are built targeting wealthy international investors and are not meeting demand for affordable homes. In 14 landmark London developments almost 40 per cent of future homes were bought by those from high corruption risk jurisdictions.

London’s role as a global safe haven is resulting in homes being purchased and not used. Areas with higher levels of property owned by anonymous companies also have high levels of abnormally low electricity usage; an indicator for empty or underused homes.

Young people are moving out of London in record numbers due to the cost of housing. Over half of Londoners responding to our survey said wealthy overseas investors are causing house prices to rise and more than 1 in 5 believed money laundering was a motivating factor for overseas investment.

Transparency International UK warns that if these issues are not addressed, corruption abroad will continue to have a negative impact on the London housing market.

Recommendations

The report’s findings pose a problem for policy makers: how can you ensure the property market is not distorted by corruption overseas without unintentionally excluding innocent investors, many of whom might be seeking to escape from tyranny and instability in their home?

Transparency International UK makes the following recommendations to the UK government:

  • Introduce greater transparency to the property market
  • Reform the UK’s anti-money laundering system
  • Retain tackling global corruption as a key priority

If these recommendations are followed, says TI UK, the negative impact overseas corruption inflicts on the people of London and its property market will be reduced and the UK’s role as a safe haven for illicit wealth will be diminished.

Video on Scottish land rights – Snowboarding, bothies and the right to roam

I hope we can one day make a video this compelling about land rights in England!

Right to Roam from Patagonia on Vimeo.

99% Invisible podcast – Making Up Ground

http://99percentinvisible.org/episode/making-up-ground/

On May 3rd, 1978, construction workers in San Francisco were digging a foundation for a new building on Sansome Street, right next to the Transamerica Pyramid in the heart of the financial district. About 20 feet below street-level their shovels hit something totally unexpected. It was the hull of an old boat.

This podcast is about manufacturing land.

 

Land for What? London – Environment and The Rights Of Nature

The focus in the other workshops is on how land can be used to satisfy human needs such as for housing, food and social space. However, what about all the other species that we share the planet with, as well as the air we breathe and the water we drink? How do we ensure that both the planet and human beings thrive?

This workshop will examine the environmental consequences of the current patterns of land use and then consider alternative ways in which we can distribute and use the land.

Andrew
Alex, Past Tense
Richard, Grow Heathrow
Lynne Davies, Open Food Network
Christine, Radical Housing Network

Land for What? London – Success Stories In Land Use

There is a lot wrong with land use in this country but where and when have things gone well!? What can we learn from success stories?

This session will explore both urban and rural case studies including Cate Chapman (Ecological Land Coop), Peter Peacock (Community Land Scotland), Jonathan Rosenberg (Walterton and Elgin Community Homes) and Zhenya Kazlou (Ecomotive).

Land for What? London – Public and Community Space

A session exploring the effect of privatisation and austerity on parks, recreation, community and public spaces Hosted by Kate Swade (Shared Assets) with Dave Morris  (National Federation of Parks and Green Spaces).

Land for What? London – Land: the Fundamentals

What facts and knowledge are important to understand when starting to think about land in the UK? This session is designed for people who are relative new comers to exploring land as a common issue and will be repeated twice as we believe many of you will find this a really useful overview and introduction to the topic.

Presented by Kate Swade (Shared Assets) and Alice Martin (New Economics Foundation).