Ghost Home’ Proposals: A horror story for the UK economy?

by on for PrimeResi

Ed Miliband’s latest plans will send shivers down the spines of the property and construction industries, along with all the other sectors that have benefited from the world’s wealthy coming to London, says Lisa Mantle.

In the first three months of 2014, investment in the UK property market hit an all-time high, according to Cushman & Wakefield, with more than three quarters of this £4.3bn coming from overseas.

These statistics have been heralded as a great boost for the UK economy; and most commentators expect the investment figures will keep climbing. However, a recent announcement from the Labour party may threaten this growth. Ed Miliband’s proposed clampdown on London’s ‘ghost hornet’ and his proposal to double council tax if a property is empty fora year, is a horror story not just for the property and construction industries, but all the other sectors that have benefited from the world’s wealthy coming to London.

If the world’s wealthy take their business elsewhere then we can expect more unemployment, even insolvencies, in the retail and restaurant sectors for a start; these wealthy foreigners contribute to maintaining all aspects of our economy, from salaries for cleaners and gardeners employed to ensure the upkeep of their investment properties, to their own spending in shops, restaurants etc. when they visit or check on their investments.

In his proposals, Miliband has said he wants to stop all UK absentee owners across England, however, realistically,this issue mainly affects London, where foreign investors tend to buy. There may be the odd country estate being bought by overseas investors, but most purchasers are in prime central London. The high concentration of valuable and luxury houses in the capital, coupled with a robust market, naturally makes it a hotbed for the global rich, keen to make a sound investment.