Housing: foreign investors head to Birmingham

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An abandoned old tesco at ground and derelict offices above are transformed into “Birmingham’s hottest property” by SevenCapital

A report in The Times on July 8 described the rush of foreign capital into Birmingham’s housing market. With cheap, cramped and ugly apartments flying up across the city, it is clear that there is money to be made.

Birmingham reportedly has the youngest population of any city in Europe, is now the most popular destination for those escaping from London and stands to benefit from even better rail links to the Capital once HS2 is completed (journey times of 1hr 15mins are already available on some services). Furthermore, with house prices a fraction of those in London it is easy to understand why workers from the south are looking to cash in and buy in Birmingham, and other poorer workers merely escape to cheaper rents in the West Midlands.

“While London and Manchester were previously the prime targets for foreign investors there has been a surge in interest in Birmingham, with overseas buyers snapping up as many as 100 flats each in new developments.

As well as the promise of huge yields renting to young people, investors are being lured by glossy brochures boasting that Birmingham is “one of the greenest [cities] in the UK” has “more miles of canals than Venice” and is home to the “iconic” Bullring. Another developer, whose conversion of a factory in the trendy Digbeth area is being marketed in Hong Kong, promises almost guaranteed rental income.

Seven Capital, which is behind numerous developments in the city, is telling investors that demand from tenants is so high that some properties are being let on the same day they are purchased.”[i]

The Times, which is not well known for being concerned with the prospects of ordinary working-class people reported that,

“Chloe Thorn, 26, has been saving for a deposit to buy a flat in Birmingham since she was 16. But when she began putting offers in she found that minimum deposits were either out of reach or flats were marked as investment-only. “It’s like being priced out of the city I’ve grown up in,” she added. “I remember when I first started looking in 2017 and seeing all these new buildings being built and thinking I may stand a chance of buying somewhere in the city once they are done. But once they went online to buy it was all investors-only on the majority.””

Capitalism only builds for profit

What Chloe failed to realise is that houses are not built so that working people can have a nice place to live, to bring up children and start a family. Under capitalism flats and houses are built so that they can be sold for a profit. Under capitalism, commodities (houses, cars, food, video games) are produced so that they can be sold on the market, they are not sold at their value, they will be sold for as much as the seller can persuade somebody to part with. Capitalism does not work for ordinary working people.

Housing under capitalism has become a vehicle for the wealthy to invest money in. The influx of foreign capital into housing in Birmingham is a consequence of the lack of better (more lucrative) schemes for the wealthy to invest in, and despite the claims of estate agents in Hong Kong and elsewhere, it is far from certain that investment like this can return the rents which these landlords hope for. Birmingham is a working-class city, more than 100,000 children live in poverty and one in five workers earn less than the Living Wage (£8.25p/h), recent accounts from the city council show that many workers cannot afford to pay their council tax with Birmingham owing £115m in outstanding arrears – not a cast-iron guarantee for great rental incomes.[ii]

Whilst estate agents will say anything to shift overpriced, poor quality housing, it is surprising that there are so many gullible enough to fall for it. Even in London the property bubble is due to pop, and there are already signs that in the highest end of the market the glory days are already over,

“Viewed from Bangalore, the purchase of a newly built three-bedroom apartment in London for more than £1.4m seemed like a safe investment bet. The top-floor three-bedroom home under construction in Keybridge House south of the Thames boasted views of the City of London and the Shard skyscraper. As Shonu Bhandari considered the purchase two years ago, agents told him he could expect the value to rise 15 per cent before the property had even been finished. The Indian entrepreneur, who runs a medical products company, happily signed up to buy. But his purchase soured quickly. When Bhandari approached a mortgage lender, it valued the property not at 15 per cent more than he had agreed to pay — but at 20 per cent less. With completion of the building looming, he signed over the property to a new buyer in March this year for £1.2m, losing more than £200,000 of his deposit.

…One new-build brochure from the estate agent Savills in 2016 said price growth in prime central London was expected to average 21.5 per cent by the end of 2020. Prices have so far fallen 10.4 per cent since that date, according to LonRes, a data provider.

“Global capital entering local real estate markets is not particularly new, but what was new was the intensity with which it entered places like Vancouver, New York, London, Melbourne and Sydney,” says Andy Yan, a planner and academic in Vancouver.”

“…In London, research by Savills shows construction continues to be out of step with demand. The London market over the next five years will need 42,500 new homes a year for sale or rent at cheaper than market rates, the property agency found — but only about 3,500 a year will be built.

Demand also far exceeds supply in the “lower” and “mid” markets, up to £700 per square foot. But above that, planned supply starts to exceed demand. In the £700 to £1,000 a sq ft category, annual demand for 7,000 homes a year will be catered for by almost 10,500.  Prices at the top end are falling, but the median London house price remains more than 12 times average earnings. “What we don’t need in London are more £1m-plus apartments with swimming pools, spas, cinema suites and service charges of £7 or £8 a sq ft [per year]. Those are not for normal Londoners,””[iii]

Socialism the only answer

Houses should be homes for people, shelter and a secure family life is a right for every worker. Houses should not, as they are under capitalism, be commodities, sold only to those who can afford to buy or rent them, rather than provided for those who need them. By its utter inability to solve the housing question and meet this basic need of working people, the capitalist system is providing yet more proof that it is well past its use-by date and due for demolition.

The Eighth Congress of the Communist Party (CPGB-ML), held in September 2018, passed a resolution on housing which put forward the basic demands of the Communist Party on the housing question. These demands form the basis of the party work on housing, and should be taken up by all advanced workers:

  1. Scrap the 2016-17 housing bill:the immediate scrapping of the 2016-17 housing bill, which threatens hundreds of thousands with poverty and homelessness.
  2. Build council houses not ‘affordable homes’:the provision of at least 300,000 new council houses per year to end the crisis.
  3. Guarantee secure social housing:guaranteed, secure and well-maintained social housing for all who want it, close to people’s work and families, and the abolition of divisive allocation criteria.
  4. Council ownership not ALMOs:the return of housing association and ‘non-profit’ properties to council ownership.
  5. Abolish housing charities:the abolition of housing charities and the reintroduction of the legal right to decent, secure housing for all; slums, overcrowding and homelessness are an indictment on capitalism and a crime against humanity.
  6. Set a rent cap: the introduction of a rent cap at 20 percent of minimum wage for all privately rented accommodation, and the scrapping of housing benefit (a subsidy to landlords that has helped to fuel rent rises).
  7. Protect existing council housing:the scrapping of all schemes that fuel prices, create shortages and offer subsidies to landlords and developers.
  8. Use existing surplus housing stock:the confiscation of all surplus homes and unfinished developments and their transformation into council housing.
  9. Provide decent homes for all:the establishment of residents’ management committees to oversee planning and maintenance and ensure that all workers have access to adequate space, necessary amenities and decent facilities, including having usable and pleasant outdoor spaces and community halls.

 

Some links

[i] https://www.thetimes.co.uk/article/birmingham-housing-foreign-buy-to-let-investors-pricing-out-locals-bkdfb2ws5

[ii] https://birminghamworker.org/2019/06/13/birmingham-council-cash-reserves-increase-by-736/ & https://birminghamworker.org/2019/07/03/thousands-of-birmingham-workers-too-poor-to-pay-their-council-tax/

[iii] https://www.ft.com/content/ea9c9abc-943d-11e9-aea1-2b1d33ac3271

Poverty on the rise as Birmingham’s Labour council freezes burial fees!

Poverty on the rise as Birmingham’s Labour council freezes burial fees!

An article carried in the Independent newspaper says the “Joseph Rowntree Foundation (JRF)[i] found that Britain’s record on tackling poverty had reached a turning point and was at risk of unravelling, with nearly 400,000 more children and 300,000 more pensioners living in poverty than five years ago. Their report showed a total of 14 million people in the UK currently live in poverty – more than one in five of the population.

Now the latest figures, collated by the End Child Poverty coalition through analysis of tax credit data and national trends in worklessness, estimate that child poverty in Manchester and Birmingham stands at 44 per cent and 43 per cent respectively. In the London borough of Tower Hamlets this reaches 53 per cent.

When broken down into constituencies, the figures indicate that Bethnal Green and Bow in London has the highest child poverty rate at 54 per cent, while in Ladywood in Birmingham 53 per cent are living in poverty. Among the 20 parliamentary constituencies with the highest levels of childhood poverty, seven are located in London, three in Birmingham and three in Manchester.[ii]

Our Labour councillors last year wasted more than £6million of tax payer’s money attempting to attack the wages of local bin men, £6m that could have been spent on child services, looking after our elderly and preventing the worst effects of poverty in Birmingham. Now they announce plans to cut a further £53m off the budget despite hiking up the Council tax this year.

The Birmingham Post reported Council Leader Ian Ward saying “We have listened and, even at a time of continuing government cuts, we are investing in the services that matter most to the people of Birmingham.”

According to the Post “Labour bosses said they had listened on several key issues, including reducing the tax hike, freezing burial and cremation fees and not introducing charges for library book reservations.”[iii]

It will be little comfort for our poor and needy to know that what wasn’t spent keeping them alive has been kept back for their everlasting interment.

What you can do

If you want to fight for a better Birmingham, and a better world, join the campaign to elect Birmingham Worker candidates to the city council:

[i] http://www.independent.co.uk/news/uk/home-news/poverty-britain-joseph-rowntree-foundation-report-theresa-may-social-mobility-commission-million-a8089491.html

[ii] https://www.independent.co.uk/news/uk/home-news/child-poverty-uk-cities-london-birmingham-manchester-welfare-cuts-benefits-food-parents-households-a8174436.html

[iii] https://www.birminghampost.co.uk/news/regional-affairs/birmingham-council-storing-up-tax-14280869

Promoted on behalf of SammI Ibrahem, Reuben Lawrence & Katherine Cremer by Birmingham Worker 274 B12 0BS

VOTE FOR SAMMI IBRAHEM VOTE BIRMINGHAM WORKER IN BALSALL HEATH

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Sammi Ibrahem gives his support to striking workers last summer

BIN COLLECTIONS AND VERMIN

Our bin collections must remain weekly and there should be no cuts to our waste services. Our streets are filthy; the attacks on bin workers last year only benefitted local rats. For a saving of £300,000 a year the Labour Party spent £6million in an attack on poorly paid bin workers making private haulage firms from Telford veritable overnight millionaires.

STOP THE LABOUR PARTY WASTING PUBLIC MONEY

No more attacks on the terms and conditions of Council workers. Millions in taxes has been wasted in senseless attacks on bin men, care workers and others who provide essential services for the city whilst earning less than £20,000 p/a. If any wages are to be cut, it must be the wages of the top Council executives. The Labour led council currently pays:

Chief Executive £180,000

Change and Support Services Strategic Director £135,000

Finance and Legal Strategic Director £135,000

Legal and Democratic Services Director is on £100,000

Customer Services Asst Director £100,000

Corporate Strategy Asst Dir £90,000

HOUSING

Our city needs decent, cheap, secure public housing, and not the allocation of more city land to private developers building expensive flats for the purpose of ripping-off students. Restrict the growth of “houses of multiple occupancy” and help families into affordable homes.

WOMEN AND CHILDREN

High-quality, safe, pre-school childcare and education, and the protection of ALL the Children’s Centres at risk from Labour party cuts. Oppose all attempts being made by the Labour party to encroach on provisions made for women and children in Birmingham.

LOOK AFTER OUR ELDERLY RESIDENTS

Bring to an end the conversion of large domestic houses into private care homes where the elderly are left in squalid conditions by capitalists who profit from not looking after our elderly. The city council must protect existing services, AND fund more services to look after our elderly. This money can easily be raised from small taxes – thousands of businesses pay no rates at all in Birmingham due to the system of “small business rates relief”, a system which is being abused by hundreds. Everybody should pay their way to look after our children and the elderly folk.

FREE BUS TRAVEL FOR PARENTS & CHILDREN, THE UNEMPLOYED & LOW-WAGED

Access to a free, fully integrated public transport system. Children up to the age of 10 are allowed to travel FREE by bus and tube in London, why not in Birmingham?! We demand the same, and why shouldn’t we get it when the Director of NX Buses took home £309,000 in 2016! This bus company makes millions from Birmingham workers, if it can’t give anything back to our women, children, unemployed and low-wages, we can find a bus company who will – or take the Company into public ownership and run it on a not-for-profit basis.

To support our campaign, get in touch:

“new” bin deal – what they give with one hand they will take with the other

The Labour party today brought it’s “new” proposals to the city cabinet for resolution of the Birmingham bin strike. The “new” report was kept secret and not even the councillors favourite journalists were allowed sight until this morning when Kathryn Stanczyszyn of the BBC began to tweet photographs of text that appeared to propose many of the basic features of the original deal conducted by Clancy and which the cabinet subsequently reneged upon.

But what they give with one hand they take with the other.

What has been released today is not the whole story. What we learn today is that the Council will change the name of the Grade 3 job. That sounds like a victory for bin men. But to make it a victory for Labour Councillors they have added in a whole new job role. It will not merely be a rebranding – it will involve a longer week for no more pay
as there are attempts to claw back the rest day (compressed working week) and put everyone into a five day week.

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The BBC journalist noted the reference to the words “retain a GR3 role” and the bizarre explanations emanating from the mouth of Lisa Trickett (Labour Cabinet member for bins):

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Trickett may hope the general public is as gullible as her local CLP (who just reselected her for 2018) but it was not lost on anybody that having wasted more than £6.6 million in taxpayers money the “new” proposals could hardly claim to have been “cost neutral”! The most vital thing to take from Cllr Trickett’s remarks is that this isn’t the keeping of the Grade 3 role – it is a new role. It is walking up the road with a ludicrous tablet in your hand, ticking boxes and making notes whilst trying to collect bins and not get run over.

The next step is for the bin men to discuss the proposals at tomorrow’s mass meeting. No doubt there will be questions over the following:

What happens to suspended trade union rep brother Rickett’s?

Brother Ricketts, trade union rep from Tyseley was suspended on spurious grounds at the start of the dispute, clearly in an attempt by bullying managers at that depot to undemrine the strike. Unite announced early on that his reinstatement was a red line. As it happened, Tyseley rose to the challenge of losing an experienced comrade and those who took over from brother Rickett’s represented the workers admirably. All bin men will want to know when he will be reinstated.

New WRCO job – how many extra days, how many extra hours?

The ludicrously titled Waste Reduction and Collection Officer, i.e., a bin man, is the attempt to mask over the failure of the Council to beat the bin men into submission, whilst trying to find another way of cobbling together the savings they insist they must make. No mention was made today in public of how much more work will be put onto the job, nor how many more days they will be expected to work, for the same pay. The compressed week is a target, and bin men will have even more work heaped upon them.

It is clear that having failed to take from the bin men their grade 3 wages the Council intends to take extra labour for free. Having undertook militant strike action that proved in practice the bin men can beat these Labour wretches, why should any worker accept that to retain their current pay they must accept a increase in their working day, epecially when they already undertake an incredibly taxing job?

Victory to the Birmingham bin men.

 

 

Join us at Councillor Trickett’s surgery this Thursday 6pm (cpgb-ml)

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Local residents outside Lisa Trickett’s surgery in September

The Birmingham bin strike is far from over. The ballot of industrial action is valid from Monday, although bin men won’t be taking strike action as they are relying on the Union lawyers and officials to come to some sort of agreement with the Council else see the matter settled in their favour in the Courts.

Reliance on the bourgeois courts is the favoured tactic of most trade union negotiators these days when settlement through agencies like ACAS isn’t possible. Having seen the tangible value of an ACAS agreement in August, and the back-stabbing antics of the Labour Party, the CPGB-ML is of the opinion that the real strength of the workers lies in industrial action and political pressure exerted against the Labour party. Closing your eyes and wishing that your cheating, lieing, underhand partner is going to change their ways is wishful thinking. The reality of the trade union – Labour party “relationship” has tragic consequences for the workers who fail to ascertain that endless pleading with Labour to “see sense” gets you nowhere – bullies only understand strength and there’s no choice but to fight them.

Join CPGB-ML outside the surgery of Councillor Trickett

Thursday 12th October 6.00 – 7.00pm

Moseley Exchange, Moseley Community Development Trust, The Post Office Building, 149 – 153 Alcester Road, Moseley, Birmingham, B13 8JP

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