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If you were to believe the hype, it would appear as though the UK property market is firmly in the grip of prosperity. While this is at least partially true, it creates a bowdlerised version of growth that does not necessarily offer an accurate reflection of the market. It is a little known fact that a disproportionate number of British homes remain unoccupied, for example, despite the fact that the property market continues to be unbalanced by a so-called lack of housing supply.
If there is one single building that embodies this issue, it is the luxurious Bezier building in London’s iconic Old Street region. Located in one of the most expensive and fashionable parts of the UK, the Bezier represented a huge real estate investment while the flats featured inside can cost in excess of £1 million. Monthly rents can also reach upwards of £2,000, and when it was built the structure was considered to be the future of real estate in the UK.
Five years on from the completion of this project, however, the Bezier is a shadow of its former self. Shaped like two sails full of wind, the structure is almost half empty as 42% of its units remain idle and have no registered voters residing in them. This is one of many vast real estate projects that have failed to create accessible and affordable accommodation in the capital, and it is part of a phenomenon that the government and local authorities refer to as ‘buy-to-leave’.
‘Buy-to-leave’ refers to a phenomenon whereby wealthy international investors procure high end real-estate without ever failing to develop it or rent out individual units. They subsequently hold onto the asset while the market’s value rises, adding to the national housing shortage and exacerbating the huge imbalance that exists in the marketplace.
When you consider the efforts made to create affordable housing and the key role played by trusted home buyers in driving a fluid marketplace, it seems a pity that this work is being undone by the actions of investors. With more than 610,000 thousands empty homes in England, alone, the UK is facing a serious issue that is impeding the portents for long-term growth.
Although the government and FCA may be loath to do so, the time may have come to place restrictions or more stringent guidelines on real estate investment from overseas.