How the UK exports London property to Hong Kong

If you want to get your hands on a prime new-build flat in the middle of London, chances are you can’t. An awful lot of them are not available for UK residents to buy.

I interviewed Faisal Islam, Channel 4's economics editor, last week. Subscribers can read the full interview in the magazine tomorrow. (And if you're not already a subscriber, you can subscribe to MoneyWeek magazine.) But there was one snippet of conversation that I didn't have room for.

Islam told me that he was at the speech George Osborne made about the economy turning the corner last month. The chancellor was, of course, mighty pleased with himself as he announced that the block in which he stood to address his media audience (the One Commercial Street site above Aldgate East station)"illustrates the story of our economy."

However, what amused some of his audience more than the sight of Osborne in a hard hat was that half the flats above him had just been put on sale in a hotel in Hong Kong. They were not available for purchase by UK residents.

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Faisal made the point that "it is possible that the effective growth in the housing stock in London is negative. All the new-build housing and much of the prime central London old-build has effectively been exported for foreigners as safe havens." They aren't used and we collect very little in the way of tax on them (see past posts on this). They are no longer really part of the UK's housing stock.

That doesn't seem like a particularly good thing. But I guess you can't deny that it does indeed "illustrate the story of our economy".

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.