It has been another stellar year for London property, which continues to attract foreign investment at record levels, in both its residential market and its commercial developments.
The latest figures from the Office for National Statistics showed house prices in Britain’s capital rose by 12 per cent over the year to October, with the average house price in the capital now £437,000 (Dh2.62 million), compared with £257,000 across England.
The rise of the London housing market is being underpinned by a flood of money from across Europe, the Middle East and Asia.
The cash has flowed to the capital as rich individuals have feared for the safety of their wealth elsewhere in the world.
But with public finances in the United Kingdom remaining extremely stretched, there is pressure on ministers to make sure that overseas investors are paying their fair share.
There have also been concerns that a house price bubble in London is being exacerbated by an influx of foreign money.
So this month the chancellor of the exchequer, the government’s finance minister, announced a heavily trailed move to make overseas investors pay capital gains tax (CGT) on the sale of their UK property from 2015.
It has been dubbed the “oligarch tax” and is predicted, by the treasury, to raise £125m over the next five years.
Previously, foreign resident owners had to pay no CGT, compared with 18 to 28 per cent for UK residents selling a property that is not their main home.
Will McKintosh, who is the head of the property consultancy Jones Lang LaSalle’s Middle East and North Africa residential business and based in Abu Dhabi, is confident that the move will not deter serious Emirati investors from buying London property.
“Many of our buyers in this region are buying for long-term investments. At some point they may sell, but equally they may not. Many will buy property in London and keep it vacant all year – so they are not really bothered about the return they can get,” Mr McKintosh, who has been working in the region for almost a decade, says.
“There remains amazing enthusiasm for London from our Emirati clients. Bricks and mortar is close to the overall culture here and people aspire to own property in London.” One client owned 15 properties in one project and that was not unusual.
The average purchase price for McKintosh’s clients who buy London properties is between £1m and £1.5m and at this level of the market, there has been little concern shown over the proposed changes.
Indeed, of all the things that could turn investor sentiment off London – the recession, shortage of property, inadequate transport, fears over the weakness of the City or fears of departure from the European Union – it is rare for these to be mentioned.
Mr McKintosh says: “Out of 100 buyers, perhaps five might raise something about the European Union or the City, but it will not stop them from buying anyway.”
His colleague, Adam Challis in London, agrees that the market is unlikely to react with any significant sell-off. “International buyers chose to own London property for a wide range of reasons that extend well beyond the current treatment of CGT.”
However, Mr Challis argues that a greater problem is the uncertainty introduced by the government’s period of consultation and the impact the tax changes may yet have on new development, which is already in short supply in the capital.
“The continued focus on increasing the tax burden on high-value property and the wealthy is unhelpful to the UK’s long-held openness to international investors. The UK taxation system is already very progressive and there will come a point, as occurred with the high rate of income tax, where increased burdens are counter-productive.”
Mr Challis argues that overseas investment in new residential supply is vital. “In a post-credit crunch world, to trigger development finance a certain proportion of sales (usually about 30 per cent) must take place first. Now it’s not owner-occupiers who buy off-plan, so without investors many developments would be unviable. Put simply, no investors, no supply – or certainly a lot less,” he says.
Jones Lang LaSalle estimates that about half of all new build in London last year was bought by overseas investors, representing somewhere between £4 billion and £5bn in investment, or 5,000 to 6,000 homes. To be clear, new build represents 13 per cent of all transactions in London (16 per cent by value) so it’s still just a fraction of the total market – but it’s still a pretty big deal.
London now competes in a global market for investment into property and if the increased CGT liability becomes a discincentive for buyers, there are plenty of other cities that will relish the opportunity to win a sale away from London.
Ultimately, Mr Challis says, slapping 28 per cent tax on non-voting foreign owners may not result in an increased tax take, but in lower investment across the board.
Rob Perrins, the managing director of Berkeley Homes, one of London’s most successful housebuilders, recently called for government to step back from a piecemeal approach to property taxation. He made a similar point: “Don’t think in terms of increasing the tax burden on a small cake. Attract investment and make the whole cake bigger.”
Niccolò Barattieri di San Pietro, chief executive of Northacre, the developer behind some of London’s most expensive residential developments including the Bromptons in Chelsea, says: “Overseas purchasers keep the development industry in business, creating employment and investment in the construction sector. Many developments built over the last five years would not have happened at all without international money funding this construction.”
Kim Vernau, the chief executive of BLP Insurance, is similarly concerned that the measure could dissuade foreign investors from coming. “The government intends to conduct a thorough investigation of this measure early in the new year and we hope they consider the dangerous signal this move would send to foreign investors,” he says.
But Liam Bailey, head of global residential research at Knight Frank, the property consultancy, is less concerned.
“It is important to note that this brings the UK into line and levels the playing field with other markets like Paris and New York, where equivalent taxes can reach 35 to 50 per cent, depending on the owners’ residency status.
“Tax is not the primary driver for people buying in London – although it will now have to be factored in. For most investors their main reason for buying in London is their belief that it is a safe bet in terms of economy.
“It’s fair to say that five years ago London was very benignly taxed for foreign residents, now it is much closer to other global cities.”
Meanwhile, one property website has predicted that UK house sellers could increase asking prices by 8 per cent in 2014. Next year’s growth is expected to outpace 2013, according to Rightmove, which measures the price sellers advertise their properties for, rather than the achieved sale price.
House prices in most parts of the UK remain below their 2007 peak, but are rising fast. According to Halifax, the nation’s largest mortgage lender, prices are up by an annual average of 7.7 per cent this year, the biggest annual increase in six years.
The gap between house prices in London and the rest of the UK is now at the highest level recorded and records look set to be broken again next year.
business@thenational.ae
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Company profile
Name: Tratok Portal
Founded: 2017
Based: UAE
Sector: Travel & tourism
Size: 36 employees
Funding: Privately funded
New Zealand squad
Tim Southee (capt), Trent Boult (games 4 and 5), Colin de Grandhomme, Lockie Ferguson (games 1-3), Martin Guptill, Scott Kuggeleijn, Daryl Mitchell, Colin Munro, Jimmy Neesham, Mitchell Santner, Tim Seifert, Ish Sodhi, Ross Taylor, Blair Tickner
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
MATCH INFO
Watford 2 (Sarr 50', Deeney 54' pen)
Manchester United 0
How to donate
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Ant-Man and the Wasp
Director: Peyton Reed
Starring: Paul Rudd, Evangeline Lilly, Michael Douglas
Three stars
Nancy 9 (Hassa Beek)
Nancy Ajram
(In2Musica)
The Transfiguration
Director: Michael O’Shea
Starring: Eric Ruffin, Chloe Levine
Three stars
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
SM Town Live is on Friday, April 6 at Autism Rocks Arena, Dubai. Tickets are Dh375 at www.platinumlist.net
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Huroob Ezterari
Director: Ahmed Moussa
Starring: Ahmed El Sakka, Amir Karara, Ghada Adel and Moustafa Mohammed
Three stars
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
THE SPECS
Engine: AMG-enhanced 3.0L inline-6 turbo with EQ Boost and electric auxiliary compressor
Transmission: nine-speed automatic
Power: 429hp
Torque: 520Nm
Price: Dh360,200 (starting)
The biog
Name: Abeer Al Shahi
Emirate: Sharjah – Khor Fakkan
Education: Master’s degree in special education, preparing for a PhD in philosophy.
Favourite activities: Bungee jumping
Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.
The specs: 2017 Maserati Quattroporte
Price, base / as tested Dh389,000 / Dh559,000
Engine 3.0L twin-turbo V8
Transmission Eight-speed automatic
Power 530hp @ 6,800rpm
Torque 650Nm @ 2,000 rpm
Fuel economy, combined 10.7L / 100km
Korean Film Festival 2019 line-up
Innocent Witness, June 26 at 7pm
On Your Wedding Day, June 27 at 7pm
The Great Battle, June 27 at 9pm
The Witch: Part 1. The Subversion, June 28 at 4pm
Romang, June 28 at 6pm
Mal Mo E: The Secret Mission, June 28 at 8pm
Underdog, June 29 at 2pm
Nearby Sky, June 29 at 4pm
A Resistance, June 29 at 6pm
FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT)
Tuesday
Mairobr v Liverpool
Spartak Moscow v Sevilla
Feyenoord v Shakhtar Donetsk
Manchester City v Napoli
Monaco v Besiktas
RB Leipzig v Porto
Apoel Nicosia v Borussia Dortmund
Real Madrid v Tottenham Hotspur
Wednesday
Benfica v Manchester United
CSKA Moscow v Basel
Bayern Munich v Celtic
Anderlecht v Paris Saint-Germain
Qarabag v Atletico Madrid
Chelsea v Roma
Barcelona v Olympiakos
Juventus v Sporting Lisbon
The%20specs
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COMPANY%20PROFILE
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A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Racecard
2pm Handicap Dh 90,000 1,800m
2.30pm Handicap Dh120,000 1,950m
3pm Handicap Dh105,000 1,600m
3.30pm Jebel Ali Classic Conditions Dh300,000 1,400m
4pm Maiden Dh75,000 1,600m
4.30pm Conditions Dh250,000 1,400m
5pm Maiden Dh75,000 1,600m
5.30pm Handicap Dh85,000 1,000m
The National selections:
2pm Arch Gold
2.30pm Conclusion
3pm Al Battar
3.30pm Golden Jaguar
4pm Al Motayar
4.30pm Tapi Sioux
5pm Leadership
5.30pm Dahawi
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
New Zealand 57-0 South Africa
Tries: Rieko Ioane, Nehe Milner-Skudder (2), Scott Barrett, Brodie Retallick, Ofa Tu'ungfasi, Lima Sopoaga, Codie Taylor. Conversions: Beauden Barrett (7). Penalty: Beauden Barrett
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
If you go
The flights
Emirates (www.emirates.com) and Etihad (www.etihad.com) both fly direct to Bengaluru, with return fares from Dh 1240. From Bengaluru airport, Coorg is a five-hour drive by car.
The hotels
The Tamara (www.thetamara.com) is located inside a working coffee plantation and offers individual villas with sprawling views of the hills (tariff from Dh1,300, including taxes and breakfast).
When to go
Coorg is an all-year destination, with the peak season for travel extending from the cooler months between October and March.
MATCH INFO
Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
'Laal Kaptaan'
Director: Navdeep Singh
Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain
Rating: 2/5
<html><head><meta http-equiv="Content-Type" content="text/html" charset="UTF-8" /></head><body><!--PSTYLE=* Labels%3aFH Label 18 Sport--><p>Beach soccer</p><!--PSTYLE=BY Byline--><p>Amith Passela</p><p /></body></html>
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
Reputation
Taylor Swift
(Big Machine Records)
2018 ICC World Twenty20 Asian Western Sub Regional Qualifier
Event info: The tournament in Kuwait is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
Teams: UAE, Bahrain, Saudi Arabia, Kuwait, Maldives, Qatar
Friday fixtures: 9.30am (UAE time) - Kuwait v Maldives, Qatar v UAE; 3pm - Saudi Arabia v Bahrain
Profile of Whizkey
Date founded: 04 November 2017
Founders: Abdulaziz AlBlooshi and Harsh Hirani
Based: Dubai, UAE
Number of employees: 10
Sector: AI, software
Cashflow: Dh2.5 Million
Funding stage: Series A
Super Bowl LIII schedule
What Super Bowl LIII
Who is playing New England Patriots v Los Angeles Rams
Where Mercedes-Benz Stadium in Atlanta, United States
When Sunday (start time is 3.30am on Monday UAE time)
Score
Third Test, Day 2
New Zealand 274
Pakistan 139-3 (61 ov)
Pakistan trail by 135 runs with 7 wickets remaining in the innings
MATCH INFO
Austria 2
Hinteregger (53'), Schopf (69')
Germany 1
Ozil (11')
OPTA'S PREDICTED TABLE
1. Liverpool 101 points
2. Manchester City 80
3. Leicester 67
4. Chelsea 63
5. Manchester United 61
6. Tottenham 58
7. Wolves 56
8. Arsenal 56
9. Sheffield United 55
10. Everton 50
11. Burnley 49
12. Crystal Palace 49
13. Newcastle 46
14. Southampton 44
15. West Ham 39
16. Brighton 37
17. Watford 36
18. Bournemouth 36
19. Aston Villa 32
20. Norwich City 29
Primera Liga fixtures (all times UAE: 4 GMT)
Friday
Real Sociedad v Villarreal (10.15pm)
Real Betis v Celta Vigo (midnight)
Saturday
Alaves v Barcelona (8.15pm)
Levante v Deportivo La Coruna (10.15pm)
Girona v Malaga (10.15pm)
Las Palmas v Atletico Madrid (12.15am)
Sunday
Espanyol v Leganes (8.15pm)
Eibar v Athletic Bilbao (8.15pm)
Getafe v Sevilla (10.15pm)
Real Madrid v Valencia (10.15pm)
Keep it fun and engaging
Stuart Ritchie, director of wealth advice at AES International, says children cannot learn something overnight, so it helps to have a fun routine that keeps them engaged and interested.
“I explain to my daughter that the money I draw from an ATM or the money on my bank card doesn’t just magically appear – it’s money I have earned from my job. I show her how this works by giving her little chores around the house so she can earn pocket money,” says Mr Ritchie.
His daughter is allowed to spend half of her pocket money, while the other half goes into a bank account. When this money hits a certain milestone, Mr Ritchie rewards his daughter with a small lump sum.
He also recommends books that teach the importance of money management for children, such as The Squirrel Manifesto by Ric Edelman and Jean Edelman.
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
