Feb 23 2007
The “white hot heat” of the London markets
??This week I read the latest figures which show just how the London economy (and to lesser extent the south-east) has detached itself from the rest of sluggish Britain. The fast growth and high incomes means that London??now pays far more in tax than it gets out in public spending, with the balance being sent north and west to pay for the rest of the country.??
The property specialists I met this week were high on the pace and level of the market. One told me the market no longer had its hotspots - the central districts are now "white hot". The market is well into its anecdotage, talking of the fabulous riches of foreign buyers, amazing prices, rapid fire deals, sealed bids at dawn,??with stories of ????people who bought a few months ago and have already turned a profit by selling on.
For months now the experts on commercial property in London have been telling clients and potential clients the market has gone far enough. It has been a great ten years for the London commercial property market, culminating in the extra movement upwards in values thanks to the government’s introduction of Real Estate Investment Trusts. Yields on property have tumbled, as more and more money has piled into the sector. Many professionals warned their clients not to buy more, and took themselves off to the continent to seek value there.
Today some of them are having just a little second thought. The property funds still seem to have plenty of money to spend in London. There is no longer a huge amount of new space being built. More importantly, there are signs in the best districts of rental growth, as hedge funds, private equity houses and others expand and look for more space.
The government could kill all this by regulating too much and taxing more. In the meantime it is good news for those who have stakes in London’s business and property sectors, and for the rest of the country who are living off the proceeds of this success courtesy of the London taxpayers.
The government has created this two tier Britain, by failing to give a favourable tax regime to domestic entreprenuers and hard workers, whilst rightly allowing a favourable regime to apply to non residents who congregate in London.There would be one thing worse than having London doing so much better than sluggish Britain - that??would be?? London doing as badly as the rest!
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John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
Could you please explain this a little more. We in the North West pay the same % of income tax on our earnings, we pay in many instances higher council tax rates, for example the last time I checked in 2001 in Lancashire a Band C house paid
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John,
I’ve thought about this issue a bit over reecnt months; apart from an across-the-board reduction in personal and corporate taxation that we’d all like to see, do you think that there is merit in advocating further and additional cuts in personal and corporate taxation specifically in the poorer areas of the country (coupled with serious moves to cut the welfare roll and other non-core state spending) as a means to regenerate those areas and move them closer to self-sufficiency?
Arthurian Legend
p.s. I linked to you a couple of weeks’ ago…any return move?
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Grrr….
You’re bigging up house price expectations. When people expect them to rise they buy more houses, that pushes demand up and prices up.
It’s bad enough being subjected to hours of ‘house porn’ on TV without MP’s fuelling the fire!
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