Why is London filling up with the very very rich?

Foreign investors flooding in.

The allure of the UK to overseas buyers has been apparent for some time and certainly long before we had a home-grown Wimbledon champion, victorious rugby and cricket teams, the birth of a Royal baby and what seems like endless blue skies and hot sunshine!

Indeed, much has been made of the influx of high net worth non-UK nationals to London and its impact on London’s buoyant prime residential property market. Undeterred in most cases by the recent hike in stamp duty land tax rates imposed upon houses priced at more than £2m, statistics show that foreign investors (and especially those who are victims of the worldwide economic turmoil, euro crisis and rising wealth taxes in their home countries) continue to look to London.

It is understood that between 45 and 65 per cent of London’s most desirable areas are owned by high net worth individuals from abroad. But, what is it that makes UK, and in particular, London, so desirable?

Recent commentary suggests that one explanation for the movement of foreign investment into the UK is that beneficial exchange rates are effectively giving those buying into London huge purchasing power, with some currencies having appreciated as much as 45 per cent against sterling over the past five years. 

Overseas buyers can, therefore, enjoy a healthy discount on their property investment as a direct result of the depreciation of sterling – the deals often made even sweeter by the UK’s low interest rates.

However, experience shows that, while these economic factors are no doubt influential, there are a number of other drivers of market demand such as the UK’s stable legal system as well as its status as an unlikely low tax jurisdiction.

Indeed, the UK has an established history of political and social stability, coupled with a sophisticated legal system, and comprehensive (if occasionally unwieldy) tax code. It boasts a comprehensive network of bilateral tax treaties: principally in respect of income tax, capital gains tax and corporation tax but also inheritance tax. 

In particular, the tax regime is highly beneficial for individuals who become resident in the UK without also becoming "domiciled" here – provided they structure their affairs appropriately.

Furthermore, it is relatively simple for international UHNWs to come to the UK. As a member state of the European Union, EU citizens of course benefit from the fundamental freedom of free movement. However, for non-EU/EEA nationals, it is possible to obtain an "investor visa" by making a £1m, £5m, or £10m investment in specified "permitted investments" in the UK (with a view to obtaining settlement in the UK within 2-5 years). Surely a relatively inexpensive gateway to the UK?

The UK investment opportunities generated by strong currencies may be relatively short-lived. Much the same might be said for this glorious weather. However, London has long been regarded as a key international business centre, a safe political haven, extremely strong in its professional services offering and a centre of educational excellence. It is perhaps, therefore, not so difficult to see why, all things considered, London really is the capital city of choice for the internationally mobile UNHWs.

Lydia Essa works for private wealth law firm Maurice Turnor Gardner LLP.

This piece first appeared on Spear's.

Photograph: Getty Images

This is a story from the team at Spears magazine.

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Why it's a mistake to assume that Jeremy Corbyn has already won

The shadow chief secretary to the Treasury on why the race to be Labour's leader is far from over.

They think it’s all over.

But they’re wrong.

The fat lady has yet to sing.

The commentary and reporting around the Labour party leadership campaign has started to assume we have a winner already in Jeremy Corbyn. The analysis, conjecture, predictions/complete guesswork about what happens next has begun in earnest. So we have seen speculation about who will be appointed to a Corbyn shadow cabinet, and “meet the team” pieces about Jeremy’s backroom operation.

Which is all very interesting and makes for the usual Westminster knockabout of who might be up and who might be going in the other direction pdq...

But I think it’s a mistake to say that Jeremy has already won.

Because I hear that tens of thousands of Labour party members, affiliates and registered supporters are yet to receive their ballot papers. And I am one of them. I can’t remember the last time I checked my post quite so religiously! But alas, my papers are yet to arrive.

This worries me a bit about the process. But mostly (assuming all the remaining ballots finally land in enough time to let us all vote) it tells me that frankly it’s still game on as far as the battle to become the next leader of the Labour party is concerned.

And this is reinforced when we consider the tens of thousands who have apparently received their papers but who have yet to vote. At every event I have attended in the last couple of weeks, and in at least half of all conversations I have had with members across the country, members are still making their minds up.

This is why we have to continue fighting for every vote until the end – and I will be fighting to get out every vote I possibly can for Yvette Cooper.

Over the campaign, Yvette has shown that she has a clear vision of the kind of Britain that she wants to see.

A Britain that tackles head-on the challenges of globalisation. Instead of the low-wage low-skill cul-de-sac being crafted by the Tories, Yvette's vision is for 2m more high skill manufacturing jobs. To support families she will prioritise a modern childcare system with 30 hours of fully funded child care for all 3 and 4 year olds and she will revive the bravery of post war governments to make sure 2m more homes are built within ten years.

It's an optimistic vision which taps into what most people in this country want. A job and a home.

And the responses of the focus groups on Newsnight a few days ago were telling – Yvette is clearly best placed to take us on the long journey to the 2020 general election by winning back former Labour voters.

We will not win an election without winning these groups back – and we will have to move some people who were in the blue column this time, to the red one next time. There is no other way to do it – and Yvette is the only person who can grow our party outwards so that once again we can build a winning coalition of voters across the country.