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London’s Housing Market: the Problems of a Globalised Property Market

 6 March 2017
 3.15pm – 5.00pm. Registration from 3.00pm, seated by 3.15pm 
 MND Function Room

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Resources

Lecture Poster (PDF: 646KB)
Lecture Report (PDF: 594KB)
Lecture Transcript (PDF: 1.0MB)

Lecture Video & Photos

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Synopsis

This talk by Chris Hamnett examines the importance of affordable social housing in cities like London, the growth of social housing until 1980 and its long term subsequent decline. It looks at the various processes which have led to the reduction of affordable housing, including right to buy, Long Term Voluntary Transfers, private redevelopment and reductions in welfare benefits, and London’s growing role as global investment destination. He will explore how social housing reached a peak in 1980 and has since then been halved as a result of some of the above processes.

Lecture Report

The decline of public housing in London and the social problems in its wake bear lessons for global cities like Singapore, says Chris Hamnett, Emeritus Professor at King’s College London.

 

“The key implication is high housing costs squeeze out the poor, unless there are counter-vailing policy measures,” said Professor Hamnett. “Without lower income workers or (those performing essential services like police and public transport workers), cities cannot function.

 

“You have to ensure that social (public) housing is spread across the city rather than concentrated in the suburbs. Workers need to live centrally to able to get in in the mornings to operate subways or provide other services.”

 

Government policy to encourage the privatisation and redevelopment of housing estates, and global investment in London’s property market, have made housing prices unaffordable for most lower income groups and pushed large parts of the population out of the city.

 

“Faced with the dilemma of ageing estates and the need…to bring them up to standards, some councils have opted to…sell estates to private developers for clearance and redevelopment. The private market, almost invariably, cannot provide profitably for lower income groups in society. The economics simply do not work unless the housing is subsidised.”

 

A proportion of redeveloped properties is usually branded as “affordable housing”, but Professor Hamnett adds: “The term affordable housing in Britain is an enormous misnomer. (It refers to rents that) are about 80% of the market rate. For the great majority of people, that is not affordable at all in any meaningful sense.”

 

The privatisation effect and high housing prices are intensified by London’s role as a global city. “Almost inevitably, private market housing in global cities is much more expensive than in non-global cities.

 

“(It has been said that) London now functions as a safe deposit box for the global rich, a safe place to park money as a part of a strategy of global asset diversification. It does not matter if the property is left empty and does not generate any rental income, or is only occupied three to four weeks a year.”

 

Particularly pertinent to Singapore is the gradual change that comes when certain estates become more desirable, leading to long-term alterations to the social mix. “One implication of the sale of public housing to occupants is that the more desirable flats in the more desirable areas are more likely to be bought by wealthier people,” said Professor Hamnett.

 

“Over a period of time, you’re going to see a process of social change, which may have implications for the distribution of the remaining housing stock, leading to such neighbourhoods becoming less inclusive. You could see the gradual gentrification of central areas.”

 

Written by Alvin Chua.

 

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About the Speakers

 

 

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