Boris Johnson has been accused of sitting by while foreign investors snap up vast swathes of London land and property in transactions worth up to £100bn.
Data compiled by Private Eye magazine shows that two-thirds of purchases made by overseas companies since Mr Johnson came to office in 2008 were by companies registered in one of four tax havens – the British Virgin Islands, Jersey, Guernsey and the Isle Of Man – some of which were British buyers registering overseas to avoid tax.
These transactions have included office and retail developments and thousands of flats and homes, many of which sit empty for some or all of the year, limiting the number of properties available for Londoners and pushing up prices.
According to the data more than 15% of the homes built in the Riverlight Quay development in the Nine Elms regeneration area have been bought by overseas firms.
In December it emerged that almost 4 in 10 of the homes sold in one part of the Battersea power station development had been sold to overseas buyers. The power station and surrounding land is also owned by a Malaysia-based company.
Last year Johnson urged developers to sign up to a “Mayoral Concordat” committing them not to market new homes overseas before they went on sale in London.
However at the same time he told developers: “I do not in any way want to deter international investment,” prompting some critics to question his understanding of the role foreign buyers play in worsening London’s housing shortage.
Critics have also cited the Mayor’s appearances at the MIPIM international property fair as evidence that he’s focusing on meeting the needs of international investors to the detriment of Londoners.
Mr Johnson has always insisted that it’s right for the capital to welcome foreign money and has previously said that overseas buyers help developers to provide “affordable” homes for local renters and buyers.
Appearing before the London Assembly on Wednesday for the regular Mayor’s Question Time session, the Mayor was questioned by Green Party AM Darren Johnson about the Private Eye data.
In response the Mayor said it was “quite proper” for him and the leaders of other UK cities to woo investors at events such as MIPIM and said investment in sites like Battersea was a “fantastic thing for London” which had revitalised a run-down area and delivered a new Tube station.
Mayor Johnson also insisted that foreign purchases accounted for “just three percent by volume” of all transactions and “six percent by value”.
Commenting on the Mayor’s answers, AM Johnson said: “I’m appalled that the Mayor continues to be so relaxed about investors buying up property in London in this way. These figures show a huge volume of property snapped up through tax havens, and whether it’s laundering money through a Chelsea mansion or dodging tax in a major regeneration project, it’s Londoners that are losing out.
“I want the Mayor’s deputy to be frank with the big property developers about this when he addresses the MIPIM property fair. They need to build homes for Londoners to live in, not assets for investors to and tax accountants. He should also lobby government for full transparency and tighter rules to block tax avoidance, including requiring that the beneficial owner is declared for all property and land in the UK.”