Cambridge City Council has been accused of “aggravating the city’s housing crisis” by promoting properties built on its land to overseas investors.
The council’s ruling Labour group has admitted to holding two online “promotional events” for Hong Kong buyers interested in the private housing on its Ironworks and Timber Works sites.
It says both sites are limited to individual buyers only, with 25 per cent of the homes for sale available to overseas purchasers.
The move has been slammed by the Liberal Democrat opposition for “stoking up the cost of housing from which local people suffer”.
The news came to light after opposition leader Cllr Tim Bick (Lib Dem, Market) questioned the executive councillor for finance and resources, Cllr Mike Davey, at a meeting of the council last Thursday.
He asked Cllr Davey to respond to the “extensive overseas marketing” of the properties which are on council land and developed by Cambridge Investment Partnership (CIP) – a joint venture between the local authority and developer Hill.
Cllr Bick pointed to both sites being found marketed online by a number of firms including Ashton Hawks, Sky International and Asia Bankers Club.
The Asia Bankers Club tells visitors to its website: “Since the global financial crisis, there has been a strong demand for physical assets investments such as properties, fine wines and art. At Asia Bankers Club, we offer a range of opportunities within this investment area to provide you with the knowledge and the connections needed when entering this market.”
Responding to Cllr Bick, Cllr Davey said he was “not aware of any extensive overseas marketing” of the two sites. He said the council was attempting to get a third party YouTube video taken down.
Cllr Davey (Lab, Petersfield) told the council: “We’re not aware of any extensive overseas marketing of the new private housing on the council-owned sites at Cromwell Road and Mill Road although we are aware of the recent YouTube video promoting the sites along with others. This is unauthorised and not commissioned by CIP.
“In the interests of transparency, it’s important to let you know that we did do two promotional events looking to see if we could find purchasers in Hong Kong.”
He added: “Sales are restricted on both sites to individual purchasers rather than bulk sales and there we have agreed a guide level of 25 per cent sales to overseas buyers.”
The Ironworks site will feature 236 homes, of which 118 will be council properties. Some 107 of the homes for sale have been purchased. At Timber Works, there will be 295 homes – 118 council properties – and of those for sale 100 have been purchased.
“This demonstrates innovative practice by the council showing what we can do both to bring in income in times of austerity and at the same time commit to meeting the housing needs of the most vulnerable in the city,” Cllr Davey said.
When challenged about the online promotion by Cllr Bick, who said he was “bewildered” by the response, Cllr Davey added: “This is not done with connivance or collusion with this city council or our partners, CIP. We are aware of the issues concerned and we’ve tried to take steps to remove it, there have been two specific events that have taken place online looking at private purchases not businesses.
“There is a limit to 25 per cent of overseas purchases.”
Cllr Davey later added that all council properties would be for people on the city’s housing list and that only 21 properties had so far been sold to overseas buyers.
Speaking after the meeting, Cllr Bick said: “To me, the local demand for housing is the important thing the council ought to be focused on – not people dabbling in our housing market from halfway round the world. The shortage of housing here is well established and I refuse to believe it isn’t possible to find buyers closer to Cambridge who will live in the housing. It’s absolutely not a question of nationality, because people from many countries who work here are as free as anyone else to buy and are always welcome into the community.
“To my mind there is one reason only for a developer to market Cambridge housing in the Far East: to keep prices high and inflate them further. But this just aggravates the housing crisis and stokes up the cost of housing from which local people suffer.”
Wendy Blythe, of the Federation of Cambridge Residents’ Associations, said: “There is real concern in Cambridge about the unsustainability of huge projected growth in this area with a water crisis and lack of infrastructure, but we all know of the serious housing shortage in the city.
“Large new developments are promoted as being needed to address that need, with the application for Timber Works’ 295 homes for example stating its design has ‘the clear aspiration to deliver homes for people living and working in Cambridge’.”
She said residents would be “shocked” at the overseas marketing events.
“This makes very clear that the growth agenda is aimed not at proving homes for Cambridge people, but is led by developers who want to make maximum profits regardless of the environmental cost, and that they are supported by our representatives,” she added.
A CIP spokesperson said: “As a partnership, we have restricted sales to individual purchasers rather than allowing bulk sales of properties and it is our commitment to build mixed and balanced communities. People may buy a property to live in or rent out and even if someone says they are going to live in it now, it is reasonable to understand that their circumstances may change over time.”
“We have experienced significant interest from British nationals based overseas, particularly BNO passports holders from Hong Kong who were looking to relocate to the UK, and we therefore held two events in Hong Kong, after both developments had been on sale for over six months in the UK.
“At Ironworks, Mill Road we are nearing the completion of the 238 new homes of which 118 council homes are being built, with 107 private sales already achieved and 54 new council homes occupied. At Timberworks 295 homes are being built delivering 118 new council homes with 100 of the 177 market sales homes sold so far.
“Cambridge Investment Partnership is bringing in income for the council in times of austerity as well as being committed to meeting the housing needs of those most vulnerable in the city.”
A statement was later published by Cambridge Labour.
It said:“Our first priority will always be addressing local housing need in Cambridge. Therefore, all private properties are marketed on a ‘locally first’ basis, then nationally for those that don’t sell.
“Ironworks and Timberworks provide over 230 council homes to those living in the city, including to those most in need. The private properties on each site help finance the provision of the council homes. All private properties are marketed on a ‘locally first’ basis, then nationally for those that don’t sell.
“Mass purchasing by international investors can be very problematic in this city, so in an attempt to prevent such sales, Cambridge Investment Partnership imposed a cap of 25 per cent on any overseas sales and a complete ban on multiple purchases. The 25 per cent is not a target for sales to people living abroad.
“CIP ran two events in Hong Kong, recognising that, owing to the political situation in Hong Kong, there are UK and British national (overseas) passport holders who want to return home permanently. There are also many British Hong Kong residents who are trying to study in Cambridge, and wish to purchase a home here because it is popular and has an established Hong Kong community. As a proudly international city, Cambridge will extend the same welcome to them as it does to all those from overseas who choose to make our city their home.
“Unfortunately, there has been other unauthorised advertising of the properties via YouTube which CIP is in the process of attempting to stop. Of the 207 properties sold to date, only 21 have been purchased by those living overseas.
“Private properties on the sites help finance our council home building scheme, the most ambitious the city has seen for decades, and which has a clear aim – to address housing need and support local communities.”
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