Home Residential Property Property rules will take billions from local councils and put them into super-rich investors’ pockets

Property rules will take billions from local councils and put them into super-rich investors’ pockets

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2nd Feb 15 11:37 am

Poorer Londoners are set to lose out

Rules that came into effect in December will cost councils billions, it has been claimed.

Super-rich property investors and developers are benefitting from the rule, which means if a company has built affordable housing in the past, it is exempt from building affordable housing in a new development.

Previously, any new housing development needed to have a section of affordable housing included, or at least the developer needed to pay the local council to build affordable homes elsewhere.

However, the new rules mean if the developer is converting an empty building and has contributed to the cost of affordable housing in the past, it need not pay on this occasion.

John Walker, director of planning at Westminster council, told The Guardian: “There will be some sites where we get absolutely nothing.

“On a forthcoming scheme we agreed that £9.1m was viable and we would lose all of that as a result of the vacant building credit. On just three schemes we consented [in a planning meeting] on 13 January we lost £29m. It is insane.”

Westminster alone is predicting to lose £1bn as a result of the change, but it will potentially affect all councils in England.

Rich investors are gaining millions from the change. For example, Qatar’s ruling family could be set to make thousands, if not more, in their £3bn redevelopment of Chelsea barracks.

In January, the Abu Dhabi Investment Council cut their contribution from £17.9m to just £9m on the 20 Grosvenor Square development.

This comes as thousands of people took to the streets at the weekend protesting about the lack of adequate housing in London and the spiralling cost of renting.

Protestors were demanding more council homes, control of private rents and to stop the demolition of properties on 70 estates.


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