Council
official despairs: 1 MILLION empty homes in London and across the UK
Empty property in Mayfair,
London. There are 3,000 empty properties in Westminster, London, an increasing
number of which are being squatted. "When I was a boy I used to
come up to London and see houses like these and think 'Wow. Who lives
there?'" says Paul Palmer, gazing up at a pair of seven-storey mansions in
Park Lane across the road from Hyde Park. "Now I know – no one. These are
owned by two different companies registered at the same address in the British
Virgin Islands.
They haven't been occupied for at least seven years, apart from
when the squatters were there in January." There are an estimated 1m empty
homes in the UK, and as empty properties officer for Westminster council,
Palmer is responsible for about 3,000 of them. Every day, he visits some of the
ritziest addresses in the capital and does his best to get them lived in again.
What makes his job unique is the staggering value of the properties on his
books: some of his Mayfair mansions are worth as much as £50m, even in their
dilapidated state. What makes his job difficult is that many of the biggest and
most expensive are owned not by dusty old dowagers down on their luck but by
mystery investors hiding their identities behind offshore companies.
"I feel it is a
tragedy," says Palmer. Many of these buildings have wonderful histories,
and are part of our heritage. For them to be left vacant and unloved for a such
a long time, pawns in a real-life game of Monopoly, is disgraceful." The
properties usually aren't abandoned for reasons which might prompt sympathy.
Palmer believes many elusive owners don't have the slightest intention of
bringing them back to life. "So often offshore owners have little or no
interest in the property as a building - it is merely an asset to be
traded as they see fit," he says, adding that offshore firms are very
tricky to track down.
Take the Park Lane townhouses,
which Palmer estimates are worth £10m apiece. The key leaseholds on each are
held by Konzeo Ltd and Weleta Ltd, two companies incorporated in the British
Virgin Islands (BVI), a tax haven in the Caribbean. Both firms ignored multiple
letters from Palmer asking them to explain why the buildings were unoccupied
and threatening to issue a compulsory purchase order – until a gang of
squatters, plus their dogs, moved in and were pictured on the front page of the Sun in
January.
Builders appeared after the
squatters were evicted, but Palmer says they were on site for only a few days
and have never returned. "It's just the same situation as before," he
says, peering through the letterbox nine months on, "only now they've left
the lights on." Within a five-minute walk of Park
Lane are 21 of the grandest properties on Palmer's list, worth between £6m and
£50m each by his estimation. Of these, seven are registered to BVI companies,
with others owned by firms incorporated in Jersey, Guernsey and Switzerland.
Many are registered at the same address in Road Town in the BVI's capital of
Tortola, just under different post office box numbers, says Palmer, who
confesses he has often gazed at the satellite picture of Road Town on Google
Maps and wondered what secrets lie beyond the satellite's range. John Samson, a property law
expert at Taylor Wessing, says offshore-registered firms buy expensive London
property as an investment, just like art or any other commodity. "One of
the reasons that people buy property in London, and in particular Mayfair, is
that there is almost always a demand for it," says Samson. "Investors
believe the value will not only be maintained but will go up, regardless of
whether it is lived in or not." Amanda Royce, a property solicitor, says
Mayfair is a particularly attractive investment location for foreigners now
because of the weak pound.
"The owners leave them empty sometimes because
they lose track of their properties. Often they have a place in New York, a
place in Monte Carlo, one in the south of France and so on."In some cases where property is
owned by offshore companies, UK capital gains tax will not be payable, says
Samson. "If an investor with a British-registered firm bought a property
for £1m one year and sold it the next for £2m, he would be liable for 18%
capital gains tax on the £1m profit."
Upper Grosvenor Street in Mayfair
ought to be one of the most desirable addresses in London. The heavily
fortified American embassy occupies a square halfway down. Le Gavroche, with
its two Michelin stars and Michel Roux Jr in the kitchen, is just around the
corner and Hyde Park is at the end of the road. Yet four grand properties on
the street have remained empty for up to eight years, abandoned and left to
ruin by their offshore owners.
No 21, registered to Boss
Holdings in Jersey and worth around £15m, has been vacant for at least eight
years. So has No 18, which is believed to be owned by an Abu Dhabi prince who
bought the property in June 2006 via a company registered in the British Virgin
Islands. He has never lived there, but others have: the 30-plus rooms of the
grade II-listed residence were squatted last November by a raggle-taggle of
artists calling themselves the Da! Collective.
No 18 is registered to a firm
called Deltaland Resources, which, according to property developer Mo Ghadami,
is owned by Sheikh Sultan Bin Khalifa al Nahyan. When the Guardian contacted
Deltaland's lawyer, Costa Keliris, at Maxwell Winward in London, asking whether
the sheikh was the true owner, he did not respond. Whoever owns No 18 looks to
have been shamed into actually developing the property. Last week, builders
were on site, tut-tutting at the graffiti left by the squatters and sprucing up
the building's crumbling exterior.
Down the street, the handsome
twin townhouses at Nos 41 and 42 have both been empty for around five years.
The leaseholds on both belong to BVI firms. One, Merix International, paid
£25.85m for No 41 in 2007. Around the corner in Park Street are three more
empty mansions, which Palmer says have not been occupied for up to eight years
but are worth a total of £40m, even in their current sorry state. "Look at
this one – it's massive!" he says, pointing to a monolithic red brick
mansion opposite the Grosvenor House hotel. It has Sellotape across the top of
the front door. "Aha," says Palmer. "The squatters have been
scoping this one out. They do it to see if anyone is coming in or out."
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