Homes are being built and left unoccupied while the majority struggle to get on the property ladder
One of the partners at Altair, Chris Wood, fancies himself as a bit of a developer.
Having worked in local government for decades, finishing as CEO at the London borough of Newham, he’s turned his hand to advising private sector clients on the machinations of local government; how to understand the labyrinthine peculiarities of particular planning authorities and how to fulfill the most convoluted of procurement processes.
I marvel at his patience and wonder at his sanity. He’s a Manchester United supporter, so it’s currently more worry than wonderment. Hey, we all have to suffer sometimes. But he has a way of cutting through stuff that makes for interesting banter and, occasionally, real insight.
We were recently talking about immigration, migration and the cost of homes. The recent Centre for Cities report on the state of our cities suggested London is the only place to be for real growth and prosperity at the moment.
This creates a bit of a dilemma for policy makers. Lose investment and it could jeopardise the recovery. Support it and we could create whole swathes of dark developments.
But as Chris pointed out to me, if you are in a home, you’re fine, unless you want to move up, in which case you are possibly stuffed. If you are not in a home and want to buy a home, you are almost definitely stuffed. If you want to move out of London, you are fine, so long as you don’t have to travel back into London for work, in which case you are stuffed. So you are probably stuffed unless you’re happy to stay put and wait. But wait for what? For the bubble to burst or for the economy to improve?
And this is Chris’s insightful comment - he describes seeing developments in London that are “dark developments:, so called because at night the majority of the homes are uninhabited. But not empty because they are unsold. Left empty because they are an investment, anticipated to grow as the economy grows. If you are an investor, especially an overseas investor, it’s still a good time to invest in the UK economy, the first shoots of recovery are now taking root and it’s this type of investment that is underpinning it.
Now that creates a bit of a dilemma for policy makers. Lose that investment and it could jeopardise the recovery. Support it and we could create whole swathes of dark developments. Not ideal for communities. But as former US president Bill Clinton said all those years ago “‘it’s the economy stupid”. That will be the priority, so don’t expect a change anytime soon.
Steve Douglas is a partner at Altair