Overseas buyers spend billions of pounds every year purchasing UK properties. This has immensely benefited the UK economy and created jobs and prosperity for so many. Some of these buyers legitimately use offshore companies to protect their privacy about their worldwide assets.
It was therefore surprising, when the Chancellor increased stamp duty from 5% to 15% for properties over 2 million pounds bought in the name of offshore companies. No local tax payer would ever find it acceptable to pay 3 times more tax, so why did the Chancellor risk undermining the attractiveness of UK properties by scaring foreign investors away?
It is of course absurd to argue that offshore companies are only used by morally repugnant people trying to avoid paying stamp duty. Even if a small minority abuse the system, surely there are better ways of stopping them rather than risk damaging one of Britain’s best sources of foreign investment.
It is equally absurd to believe that the increase in stamp duty and threats of other punitive measures is a small change for wealthy foreign investors and one that would not deter them from purchasing properties in the UK. On the contrary, these hostile measures could easily convince some purchasers that UK bricks and mortar are no longer the world’s best and safest investment in the hands of this government.
We all heard the Chancellor saying that he is a good friend to business. We also heard him saying that he understands the difficulties facing the business community better than most, having witnessed first hand, his father’s hard work in building one of the world’s leading names in wallpaper design. I am sure the Chancellor would forgive people in the property industry if they were to say that with friends like him who needs enemies.
Mamad Kashani Akhavan
13/08/2012
Is racial tension escalating out of control in the UK?
Successive British governments have been generous to an ever increasing number of immigrants choosing to make Britain their home. There are not that many places in the world where immigrants can end up receiving free health, education, housing and a passport not long after they arrive.
The influx of immigrants has resulted in UK tax-payers having to share the already limited resources of public services. In the fear of being called racist, they say nothing but grin and bear the increasing waiting time for hospital beds, social housing and a place in a local school for their children.
A gentleman I met recently said “Mr. Cameron’s government is lecturing its people to be hospitable and generous”. He continued by saying “Mr. Cameron would never share his house with strangers so what right does he have to force others to share their public services. It is not racist but just bloody unfair for the government to allow immigrants to receive benefits that they have not paid taxes for!”
The response of previous governments has been simple; they increase the expenditure on public services making the situation bearable. However, now that there is less money available – due to the economic crisis – it would not be difficult to for see that there could be increasing resentment and anger towards foreigners in the UK.
The majority of people enjoy and understand the benefits of living in a multicultural UK. However, the continuation of the current economic crisis could escalate racial tension to a level never seen before in the UK. In my opinion, it is now more important than ever for the British Government to allow people to freely discuss their resentment towards the government’s over – generosity to immigrants. As Shakespeare taught us in King Lear, punishing people for expressing their true opinion could end in disaster.
The influx of immigrants has resulted in UK tax-payers having to share the already limited resources of public services. In the fear of being called racist, they say nothing but grin and bear the increasing waiting time for hospital beds, social housing and a place in a local school for their children.
A gentleman I met recently said “Mr. Cameron’s government is lecturing its people to be hospitable and generous”. He continued by saying “Mr. Cameron would never share his house with strangers so what right does he have to force others to share their public services. It is not racist but just bloody unfair for the government to allow immigrants to receive benefits that they have not paid taxes for!”
The response of previous governments has been simple; they increase the expenditure on public services making the situation bearable. However, now that there is less money available – due to the economic crisis – it would not be difficult to for see that there could be increasing resentment and anger towards foreigners in the UK.
The majority of people enjoy and understand the benefits of living in a multicultural UK. However, the continuation of the current economic crisis could escalate racial tension to a level never seen before in the UK. In my opinion, it is now more important than ever for the British Government to allow people to freely discuss their resentment towards the government’s over – generosity to immigrants. As Shakespeare taught us in King Lear, punishing people for expressing their true opinion could end in disaster.
30/05/2012
Is this a good time for investors to sell their prime London properties?
The world is going through a turbulent and difficult time.This has resulted in the collapse of property prices in many countries. In a recent auction in Dublin, a well-known seaside hotel in Ireland that was previously on the market for 4.5m euros, was sold for only 650.000 euros.
In contrast, London’s prime property market has remained defiant and strong. In fact, prices have increased substantially since the start of the Credit Crunch. This has in large part been due to foreign investors’ continued aspiration to own prestigious London properties.
There are those however, who are convinced that prices have become so inflated that they can no longer be sustained. They believe a downward correction in property prices is inevitable. This argument is tempting savvy investors to sell now and wait for the prices to go down so that they can buy similar properties for less at a later date. I agree that prices have increased too quickly and a cooling off period in demand is likely.
However, given that there are a small number of prime properties in London most of which are owned by wealthy owners who have the ability to wait for demand to recover without reducing their asking prices, it is unlikely in my opinion, that this reduction in demand shall result in reduced prices. It could lead to a period of stagnation or slow growth but not reduction. During my recent visit to the Middle East, it was easy to see the continued unshakeable confidence that large propertyinvestors - including sovereign funds - have in the London prime property market.
Before selling I believe it is also important for investors to consider lessons from the past. I have sold many London properties for myself and others during the last 30 plus years. All of these properties were bought well and sold with a good profit. Nevertheless with hindsight, I would have done much better by holding and not selling any of these properties. The fact remains that investors who tried to time the market by selling high in the hope of buying low later have done very badly in comparison to investors that never sold.
To illustrate: in 1981 I sold a prime mansion flat over looking Hyde Park for £300,000. This worked out at almost £85 per sqft, which represented a great selling price for its time. However, at no time since selling this flat did I manage to purchase a similar flat for £85 per sqft or less. The present value of a similar flat is now approximately £10m.
In my opinion if long-term investors do not need to sell for financial reasons, there is a never a good time to sell London prime properties. As the old saying goes, "learn from other people's mistakes”………. mine included. I wish you all every success.
Mamad Kashani-Akhavan info@glfinance.co.uk
In contrast, London’s prime property market has remained defiant and strong. In fact, prices have increased substantially since the start of the Credit Crunch. This has in large part been due to foreign investors’ continued aspiration to own prestigious London properties.
There are those however, who are convinced that prices have become so inflated that they can no longer be sustained. They believe a downward correction in property prices is inevitable. This argument is tempting savvy investors to sell now and wait for the prices to go down so that they can buy similar properties for less at a later date. I agree that prices have increased too quickly and a cooling off period in demand is likely.
However, given that there are a small number of prime properties in London most of which are owned by wealthy owners who have the ability to wait for demand to recover without reducing their asking prices, it is unlikely in my opinion, that this reduction in demand shall result in reduced prices. It could lead to a period of stagnation or slow growth but not reduction. During my recent visit to the Middle East, it was easy to see the continued unshakeable confidence that large propertyinvestors - including sovereign funds - have in the London prime property market.
Before selling I believe it is also important for investors to consider lessons from the past. I have sold many London properties for myself and others during the last 30 plus years. All of these properties were bought well and sold with a good profit. Nevertheless with hindsight, I would have done much better by holding and not selling any of these properties. The fact remains that investors who tried to time the market by selling high in the hope of buying low later have done very badly in comparison to investors that never sold.
To illustrate: in 1981 I sold a prime mansion flat over looking Hyde Park for £300,000. This worked out at almost £85 per sqft, which represented a great selling price for its time. However, at no time since selling this flat did I manage to purchase a similar flat for £85 per sqft or less. The present value of a similar flat is now approximately £10m.
In my opinion if long-term investors do not need to sell for financial reasons, there is a never a good time to sell London prime properties. As the old saying goes, "learn from other people's mistakes”………. mine included. I wish you all every success.
Mamad Kashani-Akhavan info@glfinance.co.uk
07/02/2012
Is Britain today really a better place as a result of Thatcherism?
I came to study in the UK in 1978. It was not difficult even for a 15 year old to see that the UK economy was in trouble and there was a desperate need for change. The problem with the UK economy was in large part due to high taxes and therefore not much incentive for people to work hard. The change came with the election of the first woman prime minister in 1979.
Mrs Thatcher had a great influence on the people of my generation. She instilled in people the importance of self-reliance, working hard and striving to be the best at their profession. In return she promised that the government would go out of its way to reduce taxes and regulations allowing people to make more money.
Mrs Thatcher’s ideology was simple; by incentivising people to achieve more, not only would these people make themselves better off, but their success would also result in economic growth that would benefit others. The implementation of her ideology resulted in a change of fortune for the UK. It emerged from being the sick man of Europe to becoming one of the most affluent countries in Europe. But unfortunately there was a high cost and we are all paying for it today.
Subsequent prime ministers continued blindly with the Thatcherism ideology. The hunger to achieve more became exaggerated and got out of control. In Britain today, an increasing number of doctors, lawyers and politicians amongst many others, have become so obsessed in making money that they have forgotten that they should not be motivated by money only.
To illustrate, last year I needed urgent eye surgery. My GP referred me to a well-known expensive surgeon in Harley Street. He seemed under pressure trying to deal with too many patients and subsequently spent very little time considering the best option for my surgery. When we realised that the operation was not successful, the said surgeon and his assistants were more interested in knowing that they would be paid in full for my surgery as opposed to having some concern as to what went wrong.
Mrs Thatcher in her 11.5 years premiership made many necessary changes that are greatly benefiting Britain today. However, this is overshadowed by the fact that Thatcherism started a process that resulted in the corruption of social values. In Britain today selfishness and greed is legitimised and the notion that making money at other people expense has become acceptable.
Additionally, many of Mrs Thatcher’s well-intentioned initiatives to promote capitalism such as encouraging widespread share ownership, has resulted in disaster today.The ownership of large corporations has become so fragmented now that shareholders are no longer able to unite and stop managers making decisions that are in their own interest at the expense of exploited shareholders. A good example is the senior management of British Airways who
are making millions for continuing to do a bad job.
In my opinion, the Iron Lady’s resolve to make Britain a better place has only partially succeeded. However, to her credit, she was passionate in delivering all that she promised even when it was difficult or unpopular to do so. Baroness Thatcher not only talked the talk but unlike many politicians today she also walked the walk.
I wish you all every success
Mamad Kashani-Akhavan
Mrs Thatcher had a great influence on the people of my generation. She instilled in people the importance of self-reliance, working hard and striving to be the best at their profession. In return she promised that the government would go out of its way to reduce taxes and regulations allowing people to make more money.
Mrs Thatcher’s ideology was simple; by incentivising people to achieve more, not only would these people make themselves better off, but their success would also result in economic growth that would benefit others. The implementation of her ideology resulted in a change of fortune for the UK. It emerged from being the sick man of Europe to becoming one of the most affluent countries in Europe. But unfortunately there was a high cost and we are all paying for it today.
Subsequent prime ministers continued blindly with the Thatcherism ideology. The hunger to achieve more became exaggerated and got out of control. In Britain today, an increasing number of doctors, lawyers and politicians amongst many others, have become so obsessed in making money that they have forgotten that they should not be motivated by money only.
To illustrate, last year I needed urgent eye surgery. My GP referred me to a well-known expensive surgeon in Harley Street. He seemed under pressure trying to deal with too many patients and subsequently spent very little time considering the best option for my surgery. When we realised that the operation was not successful, the said surgeon and his assistants were more interested in knowing that they would be paid in full for my surgery as opposed to having some concern as to what went wrong.
Mrs Thatcher in her 11.5 years premiership made many necessary changes that are greatly benefiting Britain today. However, this is overshadowed by the fact that Thatcherism started a process that resulted in the corruption of social values. In Britain today selfishness and greed is legitimised and the notion that making money at other people expense has become acceptable.
Additionally, many of Mrs Thatcher’s well-intentioned initiatives to promote capitalism such as encouraging widespread share ownership, has resulted in disaster today.The ownership of large corporations has become so fragmented now that shareholders are no longer able to unite and stop managers making decisions that are in their own interest at the expense of exploited shareholders. A good example is the senior management of British Airways who
are making millions for continuing to do a bad job.
In my opinion, the Iron Lady’s resolve to make Britain a better place has only partially succeeded. However, to her credit, she was passionate in delivering all that she promised even when it was difficult or unpopular to do so. Baroness Thatcher not only talked the talk but unlike many politicians today she also walked the walk.
I wish you all every success
Mamad Kashani-Akhavan
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