British homebuyers at back of queue for local flats marketed in Hong Kong
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Version 0 of 1. They are just the type of starter homes many first-time buyers are looking for. Priced from £180,000, Galliard Homes is building studio and one-bed apartments minutes from local shops and only a half-hour tube journey from central London. But if you are British, you may find yourself at the back of the queue: Galliard is putting the flats on sale to investors in Hong Kong this weekend, one week before they go on sale in the UK – despite a written promise by the developer to give British buyers at least an equal chance. In December 2013 Galliard, along with other major developers such as Barratt and Taylor Wimpey, signed a pledge that they would give UK purchasers an equal chance to buy, amid widespread concern about the number of developments pre-sold to investors abroad. Four months later Galliard – the second biggest housebuilder in London – stood shoulder-to-shoulder with mayor Boris Johnson (right), with a separate undertaking. “We (the undersigned) commit to market the homes in our developments first or first equal to Londoners. New homes on every development by the undersigned companies will be available for sale to Londoners before, or at the same time, as …to buyers from other countries.” But this week, in material sent to potential buyers in Hong Kong, Galliard told investors they could snap up apartments “releasing one week ahead of UK” in what it dubbed a “world exclusive”. Well-off Hong Kongers can pop down to the Mandarin Oriental hotel today to invest in flats for sale at Central House, Hounslow, with legal fees, furniture and letting fees paid. For UK buyers, the doors remain closed until next weekend, when Galliard launches what is left of the development to the public here. Only this week at the Conservative party conference, Johnson – whose Uxbridge constituency is just minutes away from the Galliard development – demanded that new homes in the capital be sold first to Londoners. He said: “I want [homes] marketed first and sold first to the people of this country, not to oligarchs from the Planet Zog.” When we showed the mayor’s office Galliard’s plans to sell to Hong Kongers first, a spokesman called the adverts “shameful”. He said: “Every developer and international investor signed up to the mayor’s concordat should be fully committed to advertising homes in London first, and it is disappointing that this shameful advertisement means this company is clearly in breach of their pledge. The Greater London Authority has immediately written to them in the strongest possible terms to raise our concerns, and will be removing their name from our concordat agreement until this matter is resolved. The concordat is a voluntary agreement based on goodwill, and the mayor expects every company signed up to honour their pledge.” Galliard confirmed it is launching the development in Hong Kong this weekend and then in the UK next weekend. But it said it was not in breach of the pledge, in an answer that throws an interesting spotlight on how homes are marketed. It emerges that Galliard has a database of private buyers who purchase multiple properties (in other words, major buy-to-let landlords) and who are given first opportunity to buy. Because Galliard sold to these buyers first – many of whom are in the UK – it argues that Hong Kong was not given priority. A spokeswoman said: “We have been simultaneously selling apartments at Central House in Hounslow to both our UK and our overseas customers, who are on our database.” She added that only 60 of the 160 apartments had been reserved for Hong Kong buyers first. When we sought clarification on the launch programme for this development, we were told that the private database of landlords came first, Hong Kongers came second, and British first-time buyers came third. Overseas buying of UK apartments has ignited considerable political controversy at a time when critics say Britain is building fewer than half the number of homes it needs for an expanding population. In prime parts of London, almost eight in 10 newly built apartments are sold to overseas buyers, led by the Chinese, with many subsequently left empty. But the developers argue that foreign buyers have invested £2bn in London alone, helping to fund 14,000 affordable homes, 16,000 jobs and £129m in stamp duty payments. Guardian Money was alerted to Galliard’s decision to sell to Chinese investors ahead of the British by a recent emigrant to the city, who spotted its promotion. He said: “I’ve just moved to Hong Kong and have been amazed at the amount of UK property investment junk mail coming through my door. I got one this morning and it clearly shows that one of the companies – Galliard Homes – who signed the pledge is still selling overseas ahead of buyers in the UK.” Darren Johnson, a Green Party member of the GLA who campaigns on housing issues, said: “The wider issue is that developers in the London market are simply not meeting the housing needs of ordinary Londoners. There should be sanctions against developers who breach these agreements and we need to get tougher on developers in terms of affordable housing. But what we really need is a complete overhaul of the property market. “It’s also not just about overseas investors – there are plenty of British people who are buying homes and leaving them empty to sell on later at a profit. But we should perhaps be considering additional taxes on overseas investors, while allowing local authorities to borrow to build more social housing.” In a statement, the Home Builders Federation, which organised the pledge by major developers to stop giving overseas buyers preference, said: “The industry is building thousands of desperately needed homes in the capital, in all areas and for a range of budgets, and is fully committed to ensuring UK buyers are prioritised on all developments. Galliard has delivered thousands of homes on sites all over London and employs thousands of people in the capital. We will discuss with Galliard the specifics of this particular development of which we understand the majority is available – and has been sold – exclusively in the UK.” |