London's journalists enjoy conjuring acronyms to tribalise the city's different people, writes Paul Coleman.
During the post-‘Big
Bang’ era, we invented the 'Yuppy’, the 'Young Urban Professional' puppy. Then came the ‘DINKY’
tribe – ‘Double Income No Kids Yet’.
And, latterly, the media demonises working people on lower
incomes as ‘Chavs’ – or ‘Council Housed And Violent’,
according to some definitions.
High Net Worth
Individuals
HNWIs, or ‘High Net
Worth Individuals’, refers to Planet Earth’s affluent folk who congregate in
Hong Kong, Melbourne, Mumbai, New York, Paris, Rio de Janeiro, Shanghai,
Singapore and, of course, in ‘prime resi’ central London.
Apparently – and so
we must weep – HNWIs trying to buy a modest £2 million property in any one of those
cities are hindered by a range of costs and obstacles.
Apparently too –
and so we must rejoice – London rates joint second with Hong Kong in a Savills survey
of the best cities for HNWIs to buy property. New York comes out slightly on
top.
London levies
£144,000 on a £2m home, including 7% stamp duty, or 15% if HNWIs buy via an
offshore company. HNWIs also get nipped for another £4,000 on Land Registry,
legal and survey costs. Let’s not forget annual Council Tax of between £1,500
and £4,000.
ARPT
We’re not quite
finished either. From this April, HNWIs with a slab of ‘prime central London
resi’ valued at £2m and over, bought wholly or partly via a company, will be
subject to a new Annual Residential Property Tax. For instance, prime Kensington
properties worth £2m-£5m will incur £15,000 ARPT.
‘Prime resi’ homes
in the top band of £20m and over will cost £140,000 per year. Future owners of
the £70m valued Eaton Square property (see yesterday’s post) might end up with this bill. Hey, HNWIs
– guys - best buy with cash.
London's HNWI offer
Rio is cheapest for
HNWIs to buy a £2m property with taxes and costs levied up to £52,000. But
London offers HNWIs lower crime, better schools and, crucially, sustainable property
values.
Property agent
Knight Frank reckons 73% of new PCLR – Prime Central London Resi’, (c’mon
keep up) – homes in 2012
were bought by foreign HNWIs, mainly Singaporeans.
But what factors seem
to sustain central London’s ‘prime resi’ high values – especially since the financial
meltdown of 2007-09 damaged every other slice of the global economy?
And, by definition,
if HNWIs exist, so too must ‘Low Net Worth Individuals’. How does a booming PCLR
market affect London's LNWIs?
Reflections on possible
answers to follow future postings.
Paul Coleman,
London Intelligence, February 2013
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