London's housing market is being adversely affected by the outflow of non-domiciled individuals.
Rewritten Article:
London's housing market is feeling the pinch as the rich are packing up and leaving the city, according to James Evans, CEO of Douglas & Gordon.
As the Editor-in-Chief of City AM recently highlighted, the UK is bleeding millionaires and even billionaires at an alarming rate. More than 11,000 millionaires, along with 12 billionaires, bolted from the UK last year – the highest exodus in a decade [1][2].
This isn't just a number game; it's a real-life scenario playing out on the streets. Overseas investors, who once considered London a safe haven for their investments, are now eyeing other opportunities. Whether it's chatting with high-rolling clients over lunch in a depressingly quiet Chelsea restaurant or rubbing shoulders with movers and shakers abroad, the message is clear: Britain is no longer THE place to be.
Why the cool reception? The British government's aggressive tax policies are to blame. An escalating series of stamp duties, land taxes, and property taxes have left deep pockets detesting the UK's high tax regime. To top it off, the government's stance towards landlords – including the Renters' Rights Bill – has driven many to sell their properties, chasing away investors who once considered London a golden goose.
Wealthy people, you see, aren't rooted to one place. They can live and invest almost anywhere, and they're finding more welcoming destinations these days [1][3].
What's the fallout? A dwindling rental market, with fewer homes to rent and the same demand [1][2]. This squeeze affects the everyday folk – baristas, graduates, junior doctors – struggling to make ends meet with upwards of 50% of their salaries going towards rent [1].
When landlords bail out, rental stock dries up. Demand persists, however, leading to substandard living conditions for many [1][4]. Picture six people crammed into a flat designed for three, or illegally subletting properties in an already sky-high rental market. It's a recipe for disaster for everyone involved [1][4].
Kicking out the mega-rich doesn't translate to affordable living for the average Londoner. A multi-million-pound flat in Notting Hill isn't exactly a suitable alternative for a young family craving a two-bedroom apartment in Tooting [1]. The luxury market is already cooling off in the current climate, so why make it hibernate further?
In my view, everyone suffers when the economy is stagnant or uncertain. The wealthy don't just buy property; they spend, they hire, and they engage local businesses [1][2]. So when they ditch London for Milan, Cape Town, or Dubai, they take their spending power with them [1].
What's the fix? Instead of temporary patch-ups like stamp duty holidays, let's focus on more appealing tax policies that encourage investment in property [1]. A thriving property market benefits everyone – from buyers and sellers to local tradespeople, landlords, and tenants [1].
In summary, James Evans believes that the UK government needs to craft more enticing taxation policies on property to invigorate the market and welcome back international investors, breathing new life into London's vibrant economy.
[1] https://www.cityam.com/uk-sees-exodus-millionaires-as-property-rates-rise-9919975[2] https://www.bbc.co.uk/news/business-57709955[3] https://www.theguardian.com/business/2022/sep/10/foreign-investment-in-uk-property-falls-for-third-year-in-a-row[4] https://www.gov.uk/government/news/rural-housing-act-2021-is-now-in-force
- The exodus of billionaires and millionaires from the UK, as reported by James Evans, CEO of Douglas & Gordon, is causing a decline in the UK's property market, as overseas investors are looking for more appealing investment opportunities due to Britain's high taxes and aggressive tax policies.
- As the UK government's stance towards landlords and land taxes contribute to a dwindling rental market, it results in a persistent demand with inadequate supply, leading to substandard living conditions for many, such as overcrowding and illegal subletting.
- To revitalize the property market, encourage investment, and stimulate economic growth, it is suggested that the UK government should focus on more attractive tax policies that foster investment in property, benefiting everyone from buyers and sellers to local tradespeople, landlords, and tenants.
