Martin Vander Weyer
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The Chancellor has ‘come down like a ton of bricks’ on stamp duty avoidance, partly to be seen to be doing something painful to wealthy homeowners short of conceding the Lib Dems’ longed-for mansion tax. But there is still an unhealthy distortion at the top of the property market from which, one way or another, more tax revenue might be extracted without offending voters at all.
A West End estate agent told me this week that he has not sold a house to anyone British for more than two years. If the buyers are not from the Middle East, they’re from Italy, Spain and Greece, in most cases making pure ‘safe haven’ investments: content to leave the property empty in the knowledge that it’s unlikely to fall in value, or be seized by revolutionaries, or incur taxes that hurt and can’t be avoided.
That’s why the average asking price for a family house in Kensington and Chelsea has passed £2 million — and probably why the private equity firm BC Partners has just bought back the rollercoaster-performing estate agency Foxtons, which it first bought at the height of the boom in 2007. But if Greek surgeons and Syrian generals with suitcases of cash really want a safe haven, let them buy gilts and help fund the deficit. Driving Londoners out of their own housing market without providing significant trickledown effects is no contribution to UK economic recovery. As Boris keeps saying, everyone’s welcome in our cosmopolitan capital — but we can all agree that foreign owners of empty mansions deserve to be taxed till the bricks squeak.
Other contributors have already saluted the centenary of the loss of the Titanic, but this column will continue to celebrate the doomed ship’s timeless legacy to financial journalism, the Titanic metaphor. Impossible to count the number of icebergs that have loomed in the night and bands that have played on as the decks splintered in coverage of the banking and economic crises of recent years. But the prize for the most extended and imaginative use of the genre must go to Estonian historian Anti Poolamets, whose ‘Welcome to the Titanic!’ campaign in 2010 failed to persuade his countrymen not to abandon their own currency, the kroon, for the euro — making Estonia ‘the passenger that got the last ticket’.
In the spirit of Poolamets, rest assured that the great wreck will never rest quiet on the ocean floor as far as Any Other Business is concerned, even after next month’s anniversary has passed. Meanwhile I am discovering more food for thought on every page of Richard Davenport-Hines’s brilliant social history Titanic Lives, including this observation as to why the British are more hostile to wealth than the Americans, though the gap between the first-class super-rich and the poor down in steerage was and still is so much wider over there: ‘The hungry beggar who glimpses a sumptuous feast feels more marvel than hatred. Envy occurs when people become capable of mutual, and invidious, comparison.’
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