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Manchester’s property investment boom funded through tax dodging offshore companies

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http://www.themeteor.org/2017/08/01/manchesters-property-investment-boom-funded-through-tax-dodging-offshore-companies-unethical-international-investment/

“If you listen to the media we are having a boom, this is great news, the Daily Mail is telling people from down south to put their money into Manchester. The local press are trumpeting a Chinese style building boom. I found this really interesting because I thought we were having a housing crisis not a housing boom.”

"Financialisation

The boom in buy to rent goes hand in hand with new financial packages that allow large institutions or corporations to buy apartments, sometimes in blocks or whole development sites, for the purpose of renting. And due to local authorities’ failure to enforce Section 106 agreements, which can force the developer to provide affordable rent flats, the large majority of these flats will be at market rent.

Why Manchester is becoming increasingly popular for this type of venture becomes clear when the investment returns are compared. Gross yield is the rental income expressed as a percentage of the property value, the higher the yield the greater the return on the investment.

In the London borough of Kensington the average rent is £1,732 per month and the average cost of a house is £1,103,645, which provides a ‘Buy to Let’ gross yield of 1.8%.

In Central Manchester the average rent is £1,230 per month and the average cost of housing at £177,546 gives a ‘Buy to Let’ yield of 8.3% – a full 6.5 percentage points higher than Kensington.

With figures like that it is no wonder investors are queuing up to put their money into Manchester. The Telegraph reporting on the issue said “Manchester has been revealed as a hotspot for build-to-rent construction, nearly eclipsing London.”

 

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Map of properties in England and Wales owned by offshore companies.

http://www.private-eye.co.uk/registry

IN September 2015 Private Eye created an easily searchable online map (see below) of properties in England and Wales owned by offshore companies. It reveals for the first time the extent of the British property interests of companies based in tax havens from Panama to Luxembourg, and from Liechtenstein to the South Pacific island of Niue. Most are held in this way for tax avoidance and often to conceal dubious wealth.

Using Land Registry data released under Freedom of Information laws, and then linking around 100,000 land title register entries to specific addresses, the Eye has mapped all leasehold and freehold interests acquired by offshore companies between 2005 and 2014.

Using this data the Eye published a series of exposes of the companies, arms dealers, oligarchs, money launderers and others who use offshore companies. Now Private Eye, using the same data, is also publishing a database of all properties acquired by offshore companies from 1999 to 2014, showing the address, the offshore corporate owners (some have more than one) and, where available, the price paid.

 

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