I wrote here last week about how politics in Britain (the referendum, the mansion tax etc) may well spell the end of the boom/bubble in prime central London property prices.
More evidence of this comes this week with changes to the Tier 1 visa system. Until now, getting the right to be a permanent resident of the UK has been pretty easy and effectively cost-free for rich foreigners.
Invest £1m in the UK and you could buy the right to stay for five years, then to apply to be a permanent resident, and then, six years in, to apply for citizenship. Invest £5m or £10m, and you can move the whole thing along even faster.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
However, that investment has not had to be in anything that adds value to the UK as a whole instead, houses and government bonds have done perfectly well. You could have put £750,000 into bonds and £250,000 into property, knowing perfectly well that your odds of losing your money were minimal.
But from Thursday, the total amount you need to shovel into the UK will rise to £2m (still pretty cheap if you are a rich citizen of a horrible place and want to live in a nice place). But property will be excluded.
You will still be able to buy relatively safe equities and bonds (I say relatively, because inflation means bonds are never really safe) . But not central London houses.
This won't have much of an effect on its own the numbers for Tier 1 are relatively small. But it is another indication of the political direction of travel.
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
-
Beating inflation takes more luck than skill – but are we about to get lucky?Opinion The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank of England may be about to get lucky.
-
Rishi Sunak can’t fix all our problems – so why try?Opinion Rishi Sunak’s Spring Statement is an attempt to plaster over problems the chancellor can’t fix. So should he even bother trying, asks Merryn Somerset Webb?
-
Young people are becoming a scarce resource – we should value them more highlyOpinion In the last two years adults have been bizarrely unkind to children and young people. That doesn’t bode well for the future, says Merryn Somerset Webb.
-
Ask for a pay rise – everyone else isOpinion As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why you should do that too.
-
Why central banks should stick to controlling inflationOpinion The world’s central bankers are stepping out of their traditional roles and becoming much more political. That’s a mistake, says Merryn Somerset Webb.
-
How St Ives became St Tropez as the recovery drives prices sky highOpinion Merryn Somerset Webb finds herself at the epicentre of Britain’s V-shaped recovery as pent-up demand flows straight into Cornwall’s restaurants and beaches.
-
The real problem of Universal Basic Income (UBI)Merryn's Blog April employment numbers showed 75 per cent fewer people in the US returned to employment compared to expectations. Merryn Somerset-Webb explains how excessive government support is causing a shortage of labour.
-
Why an ageing population is not necessarily the disaster many people think it isOpinion We’ve got used to the idea that an ageing population is a bad thing. But that’s not necessarily true, says Merryn Somerset Webb.
