ADD2062 Research on overseas buyers in London new build property

1.1 The GLA wishes to commission the University of Sheffield to undertake detailed examination into the proportion of overseas buyers in new build property purchases and empty homes in the London housing market. This will be part of an evidence base supporting policy development into maximising use of London’s housing stock, particularly to ensure that newly built homes will be occupied.

1.2 The GLA is also commissioning research in a related area to understand the role of overseas investors in the London housing market, specifically looking at their role in financing development, the location of their activities, and the extent to which they add to London’s housing supply. This has been approved through ADD2054 ‘Commissioning of consultants to research the nature, extent and role of overseas investors in London’s residential property market’. The research in this commission will complement that work. Further detail of the exact nature of the work to be undertaken is set out in the research brief (appendix 1).

1.3 The single supplier being sought for the provision of this service is the University of Sheffield. It had previously bid for the commission referenced in paragraph 1.2 and provided a robust and unique methodology for achieving a particular aspect of the research. No other bidders for this commission provided a methodology of comparable quality or rigour. Their proposed methodology uses a bespoke combination of commercial databases, Land Registry information and a further database looking at nationality and ethnic origins to make robust estimates of overseas purchases of homes. This is considered to be of particular value to achieving the outcomes and outputs noted in section 2, and will significantly enhance the quality of both the research into overseas investors into London’s property market as well as the evidence base for the new London Plan, and as such is considered to add value to both.

2.1 The objective of the research is to significantly improve our understanding of the role of overseas buyers in the London property market in order to inform public knowledge and policy-making. The outcome will be a robust evidence base that will inform the development of the Mayor’s housing and planning policies.

2.2 The research will provide detailed data on the proportion of new homes in London that are bought by overseas buyers, and the extent to which those homes are vacant. The main output will consist of a detailed report of the consultants’ work, currently scheduled to be completed by March/April 2017, with an interim report to be presented to the GLA in early 2017.

3.1 The aim of the work is to enhance the GLA’s understanding of the London housing market, particularly the extent and nature of how housing stock is used, Londoners’ ability to access housing in the city and how this affects housing outcomes in London. The Integrated Impact Assessment of the London Housing Strategy states that delivering new housing, including affordable housing, is likely to have broadly positive benefits in relation to social and economic sustainability objectives such as improving health, reducing inequalities, increasing accessibility, and economic development. Any new policy documents arising from this research will be subject to a similar assessment.

a) Key risks

4.1 The key risk associated with this piece of work is the difficulty in accessing robust and consistent data on which to base analysis. This is mitigated by the consideration that the University of Sheffield presents particular value, as they offer a unique methodology for collecting and analysing data around the nature of overseas purchasers of new homes in London, and related issues of occupancy. This would be of significant benefit to the GLA’s development of housing and planning policy.

b) Links to Mayoral strategies and priorities

4.2 The Mayor’s manifesto committed to improving Londoners’ access to new homes. The Mayor has since commissioned ‘the most thorough research on this matter ever undertaken in Britain’ (see paragraph 1.2). The research will also form part of the evidence base for the new London Plan, particularly in relation to policies on empty homes and maximising use of housing stock.

c) Impact assessments and consultations

4.3 Any new statutory London Housing Strategy containing policies that are relevant to this issue will be subject to consultation and a full and independent Integrated Impact Assessment. Any new London Plan will be subject to consultation and an Examination in Public.

5.1 This decision requests an approval to expend £28,000 to commission consultants supporting the GLA’s work in understanding the scale of overseas buyers in new build property purchases and empty homes.

5.2 £18,000 of this expenditure is available from Housing & Land Management and Support Consultancy Budget, with a further £10,000 from the Planning Unit London Plan Budget. The total expenditure is expected to be incurred in the 2016/17 financial year.

5.3 Any changes to this proposal, including the requirement of additional funds, will be subject to further approval via the Authority’s decision making process.

6.1 Sections 1 to 4 of this report indicate that:

6.1.1 the decision requested of the Assistant Director, in accordance with the GLA’s Contracts and Funding Code (the “Code”), falls within the GLA’s statutory powers to do such things considered to further or which are facilitative of, conducive or incidental to the discharge of its general functions; and

6.1.2 in formulating the proposals in respect of which a decision is sought officers have complied with the GLA’s related statutory duties to:

• pay due regard to the principle that there should be equality of opportunity for all people;

• consider how the proposals will promote the improvement of health of persons, health inequalities between persons and to contribute towards the achievement of sustainable development in the United Kingdom; and

• consult with appropriate bodies.

6.2 Section 4 of the Code requires the GLA to seek three or more written quotations in respect of the services required or call off the services required from an accessible framework. However, the assistant director may approve an exemption from this requirement under section 5 of the Code upon certain specified grounds. One of those grounds is where the supplier is unique in its ability to provide compatibility with an existing service. Officers have indicated in this report that this ground applies, and that the proposed contract affords value for money.

On this basis the assistant director may approve the proposed exemption if satisfied with the content of this report.

7.1 The GLA will procure the consultants by sending a brief to the University of Sheffield asking for a tender to be submitted to the GLA for consideration. Following receipt of the tender it will be considered according the criteria set out in the research brief.

7.2 Particular consideration will be given to the extent to which any received bid offers value for money, the cost for which this might be supplied, and the timescale in which it could happen.

7.3 Once the consultants are appointed, an inception meeting will be held to refine the timetable and methodology for the research. Following this, GLA officers will be in regular contact with the researchers to ensure that the outputs described in the project brief are delivered.