One of London’s highest profile and most outspoken estate agent chiefs has scolded ‘Maybot’ Theresa May on the day she is to address the Conservative Party conference.
Trevor Abrahmsohn of Glentree Estates - who has taken government to task in recent months over its housing policies - says the Conservatives’ plan to introduce a one to three per cent stamp duty surcharge on the price of any property bought by a non-UK tax paying foreigners is bound to hit the London market.
“Clearly, the Tory Party are so worried about the existing paltry housing stock, that they want to stop non-UK residents ‘pecking away’ at it. This demonstrates how poorly they understand why we have a broken housing market. It’s all about supply and not about demand” he says.
Abrahmsohn, whose agency sells high-end properties including those on The Bishops Avenue in north London, says a mix of environmentalists and local councillors already play a part in ensuring that the number of new homes built falls far below demand. On top of that, Green Belt policies are unnecessarily restrictive, he claims.
“‘Maybot’ has promised to build 300,000 new homes in the UK, however, we are probably building only about 125,000” he says.
“The fiscal changes to Non Dom residency, the existing hikes to stamp duty (even more so for foreigners) and the changes to corporate ownership of UK property, have all conspired together to reduce the demand for UK property from abroad, from a torrent to barely a trickle now” he adds.
Abrahmsohn also warns that developers are pulling out of London like rats leaving a shop and he cites Barratt Homes as one example.
“Particularly in the post Brexit era, we need to attract wealthy foreign investment to this country and not the reverse. … Historically France, Italy and Portugal have all been envious of the UK’s ability to attract these wealthy foreign nationals and are now climbing on to the band wagon by redesigning their own tax regimes, in order that their fiscal environment becomes more attractive” he warns.
Abrahmsohn has now called on Chancellor Phillip Hammond to cut Corporation Tax in this month’s Budget, and make Britain an oasis for multi-national companies.
“We understand if they need ‘brass plate’ offices in Frankfurt, Paris and Brussels in order to get around any regulatory hurdles that the EU may impose, but the head office should be in the UK benefiting from all the attractions that the ‘greatest city on earth’ – London – has to offer.”
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London agents loudly defending their narrow commercial interests should perhaps pause for breath. Even before Salisbury, but especially following it, there has been a sea change in opinion on the desirablity of allowing London property to launder money. The vast majority of the country see that this confers absolutely no benefit to the country at all, as almost all of it goes into bidding up existing properties. The only winners are the agents and accountants who facilitate it. But I would advise caution. The Danske Bank story is only just getting going. €200 billion of Russian money was laundered through that bank. And let's remember how this money is generated: prostitution, drugs, arms dealing and frauds committed online against British citizens. This money all went into Estonia and then out again. The FT today asks: where did the money go? Well I hope I am wrong, but I suspect that some people reading this thread know exactly where it went. And as the investigators and journalists pursue it (as I know they are doing), I would pretty concerned if I felt that any of it had passed through my client account. Like the expenses scandal and so many others, these things have a habit of laying dormant for ages and then exploding into a massive crisis with people being prosecuted etc. So calls for a "relaxation" in non-resident ownership of UK property with no questions asked are doing huge harm - in my opinion - to the reputation of our professional. And are about as far away from public opinion as you can get.
Stamp duty is already ludicrously high. Taxation stifles everything. Rather than copying Jeremy Corbyn
by raising taxes, they should be doing the opposite. The Govt can count the money coming in from SDLT, but can they see the downsides of having so few transactions. When i started in this industry it was common to hear that people moved on average every 7 years. According to Zoopla it is now every 24 years. Get transactions back up to 2 million with an average spend per move of 50k equals £100 billion. VAT = £20billion. Plus lots of jobs for kit/bathroom/window/surveyors/conveyancers, etc, etc all paying VAT. Something to do with the huge tax payable on moving homes is damaging the economy and Brexit is nearly here. All this tax on a home is going to make it more difficult for builders to sell them. And i hear the Gov't saying "we need more homes". What a great incentive to build. All mad.
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