An investigatory documentary titled ‘From Russia With Cash’ recently on Channel 4 involving two reporters posing as potential buyers of homes in some of London’s most expensive postcodes. Using covert filming, “Boris” one of the reporters disguised as a Russian government official went to five estate agents around Chelsea, Kensington and Notting Hill to see whether they would carry out a sale on a mansion after he told them the money had been stolen from the Russian government. The narrative of the documentary put foreign investment as responsible for driving up prices in London’s property market, whilst stating that a large proportion of this wealth was laundered through criminal activities of foreign investors who use properties in Mayfair as a haven.
Within the narrative of the show is the belief that Russian investment in property is causing inflated housing prices across the capital. Findings in a YouGov poll published last year, found similar ideas amongst Londoners who “believe that the biggest cause of soaring house prices is rich people from overseas buying top-end property – and 60% want to make it more difficult for them to do so.” Wealthy Saudis in particularly have been singled out for purchasing property on “Billionaires Row” and allowing it stand derelict and disused.
"Londoners are being priced out of the housing market by an influx of foreign buyers, who see London property as an investment and in many cases leave properties sat empty as 'ghost homes', Tooting Labour MP Sadiq Khan told the Independent. There are investors from overseas who are deliberately feeding into the speculative housing culture that emerged after the Right to Buy scheme turned social housing reserved for those who need it the most, into a commodity to be purchased. However, the TV programme perpetuates a stereotype of Russians regarding London’s housing crisis despite the fact that the situation was fabricated by the producers for the intentional duplicity of the estate agents.
Furthermore, by focusing on home purchases by people from overseas, the documentary failed to account for other factors contributing to the crisis such as shortages of social housing and a lack of adequately sized and reasonably priced housing for those who cannot afford to buy their home outright. Member of the Mayor of London’s Housing and Equality Standing Group Sue Lukes told Migrant Voice in 2012, that as government policies were more in favour of those who owned their home since the 1980s, the number of affordable homes for first time buyers and social housing has been in sharp decline. Lukes also made it known that “the housing shortage will continue even if no new immigrants arrive. And if no new migrants arrive, we may not be able to pay for the new homes we need or to build them.”
So, a narrative that blames “foreign investment” ignores the culture of investment in property as being responsible for inflating housing prices and creating home shortages. Homes bought under the Right to Buy scheme and property developers funded by the Buy to Let boom are examples of the housing culture in Britain that turns housing into a commodity to be invested in. Selling off social housing in the 1980s stimulated a system of home ownership and a lack of new, affordable social housing being built to compensate for this. “Only three per cent of all London homes are bought by foreigners – by value, 65 per cent” according to YouGov. This means that whether the owners are foreign or not, the culture of home ownership and property development enterprise will mean someone will buy these millionaire mansions and they will appreciate in price because that is what the housing culture in Britain encourages over renting. In London where there is strong demand for property and a noticeable lack of supply that is affordable for all, speculation whether domestic or from overseas, will exacerbate the problem of affordability. Curbing overseas investment in the London housing market does not challenge home ownership for speculation and profit. Nor does it address the social housing shortage that was predicted to plague London 13 years ago.
Instead, it simplifies the issues faced by the capital when the problems with housing are more complex and wide-reaching than that.