Don’t steer us onto the rocks Vince
That was the week in property, by Mike Hoffa
23rd January 2012
It’s somewhat incredible, given the amount of safety technology we have these days, for a disaster like the Costa Concordia sinking to happen.
Sadly, as more and more evidence emerges it’s starting to look quite bad for Captain Francesco Schettino, with allegations of unapproved course changes and leaving the sinking ship very early on, suggesting that he abandoned the remaining crew and passengers to their fate. All will no doubt come out in the full investigation, but what started as apparently some kind of daring “maritime salute” has resulted in at least 11 deaths.
Whatever the outcome, there was clearly no intent to crash the ship and cause any loss of life, but the road to hell is paved with good intentions as they say and the “unexpected consequences” could perhaps have been predicted with a bit more foresight, despite claims that the rocks on which the ship collided are not present on any maritime charts.
“Vince Cable has just announced his intent to put into place a new ‘mansion tax’ on high value properties…”
Unexpected consequences when it comes to the economy too is a theme I keep harping on about and it’s quite pertinent this week, as Vince Cable has just announced his intent to put into place a new “mansion tax” on high value properties, as the Telegraph reports. The proposal put forward by Mr Cable (and supposedly backed by some Conservative MPs) is that a 1% tax should be levied on properties worth more than £2m.
The Telegraph goes on to quote Vince Cable as describing it as “perverse” that rich “foreigners” can buy high value UK properties and contribute nothing towards the economy other than £1,000 per year in council tax.
And this, I’m afraid is where old Vince is starting to look about as sensible as Captain Schettino.
If you consider for a moment the piece I wrote last week about investment in our capital city, where I discussed the high level of investment from wealthy foreigners in London you might start to get an idea of how misguided this mansion tax proposal is. The fact is that London has consistently bucked the property market stagnation we have seen in most parts of the country, as it continues to see remarkable growth in value and interest.
“To dissuade such investors from putting their money into UK property is quite simply barking mad…”
Much of this interest has come from outside the UK, but these wealth overseas investors bring far more with them than just an interest in a UK holiday home. They are typically successful business people themselves and it brings their business interests to the UK too, which can only have a significant positive impact on our economy.
In other words, to claim the impact of such foreign investment is limited to council tax is ludicrous. To dissuade such investors from putting their money into UK property is quite simply barking mad, with potentially disastrous consequences for the broader economy. As a bare minimum, it is almost certain such a scheme would cost us far more than it gained.
The only saving grace is that the Chancellor, George Osborne, is unlikely to approve such measures. Hopefully he will act as a “lighthouse of sanity”, but please Mr Cable – don’t steer our economy onto the rocks with your mad manoeuvres.
About the author:
Mike Hoffa has been working in the property sector for more years than he cares to remember, as a tenant, first time buyer, second time buyer, landlord, adviser and general trouble maker. He keeps his real identity fiercely secret, but some say he can often be found at the back of property auctions howling, but only when a full moon is out. He’s also rumoured to be of average height, weight, ethnicity and class, which he claims accounts for his inability to be politically correct or wear pastel coloured cardigans.
Mike’s question of the week: What do you think of a proposed mansion tax?
Tags: makeoffer.co.uk, Property, Property Auctions, UK Property Market