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The Independent
a minute ago
- The Independent
‘Owning a £500k home does not make you rich': Readers challenge Reeves' property tax plan
Independent readers are divided over proposals being considered by Chancellor Rachel Reeves for a new tax on homes worth more than £500,000, with many questioning whether the threshold would unfairly affect ordinary homeowners rather than the truly wealthy. Several argued that in high-priced areas, £500,000 is not a marker of wealth, with smaller homes often costing more than that. 'In London and parts of the South East, owning a £500k home… does not make you rich,' noted one reader, while others suggested a higher threshold or regional variations to avoid penalising middle-class families. Some readers welcomed the idea of targeting unearned property wealth, arguing that decades of house price rises have created inequalities that younger generations cannot overcome. 'Taxing property, targeting unearned income, is what the government needs to do,' one wrote. Others warned the tax could have unintended consequences, including discouraging downsizing, reducing housing market mobility, and forcing homeowners to raise asking prices to offset the levy. There were also concerns that pensioners or couples on modest incomes could be hit unfairly. Across the board, readers emphasised the need for a fair approach that distinguishes genuine wealth from ordinary homeowners. Here's what you had to say: Regional house price disparities I have recently moved from Berkshire to Yorkshire. The semi-detached house I've bought was £200,000 in Yorkshire, but the equivalent and possibly terraced house in Berkshire would have been £500,000. So this tax would certainly be a detriment to workers in the South East. The salary weighting is far from compensating for the house price difference. Over a £1,000,000 might be a more appropriate national figure, but possibly there would need to be some regional differences. This could also be reflected in IHT rates for inherited property. The problem that really needs to be addressed is ensuring that richer people actually pay tax on all their income and/or property, and that they are not able to legally "evade" tax using loopholes. DavidWR Property wealth tax concerns A tax on the unearned wealth of property due to the housing market of the last 40 years is a sensible tax. However, £500,000 is too low. It will bring many people who are just making ends meet into paying a tax they can't afford. In many parts of the country, especially the South East, £500k will barely get you a two-bed terrace house. If a couple has scrimped and saved to buy one in the last few years and can just afford the mortgage, they may end up being stuck in a property they can't afford to sell. That will impact both job mobility and the housing market. Maybe raise it to £750k to ensure it's only the genuinely wealthy that pay it. Tabbers Redistribution of unearned property wealth A lot of people are missing the point… too much of the nation's wealth has been tied up in property, with huge increases in prices over the last 20–30 years, all to be passed on to siblings. Younger generations without rich parents don't stand a chance. The government has no choice but to try and extract this unearned income and attempt to redistribute it to give other people a future. Taxing property, targeting unearned income, is what the government needs to do (and ignore the naysayers). ChrisMatthews Regional variation needed £500K is far too low… no way is this a wealth tax, more just about managing tax. The average cost of a home around here is about £450K, and that is a two-bed terrace. Surely the price should not be a blanket one but reflect different areas? mindful Impact on downsizing All that is going to do is make it far more likely that people in larger houses won't downsize, leading to increases in the value of those houses as the market dries up. The cost of moving house is already stopping many pensioners from downsizing. The level should be far higher or adjusted for regional differences at the very least. KrakenUK Inefficient housing stock In the south of England, developers only want to build large homes as that's where they can make the most profit. They justify the need for large homes by stating there is a terrible shortfall. In reality, there are millions of large homes in the UK with single elderly people rattling about in them, when a smaller, more efficient, quality home would make far more sense. Older people balk at the thought of selling up and paying loads in Stamp Duty for their new home. A new 'selling' tax will just cement this inglorious cycle. Hardly Surprised Council tax outdated This Council Tax was a last-minute replacement for the Poll Tax. It has become as unpopular because it is based on property prices nearly 35 years ago. Things have moved on since then, and so should this tax system. jadfg Illusion of wealth through property The illusion that you create wealth while sitting on your backside checking Zoopla to see how much your house has gone up has to be broken. Work creates wealth. Property prices just redistribute it unfairly. The worst result of house price booms is the emergence of millions of little property empires of buy-to-let investors who retire at 45 and contribute nothing thereafter. Ironically, they end up renting to each other's kids, but their imagination doesn't stretch that far. Carolan Middle-class southern households Labour seem determined to lose all support everywhere. In London and parts of the South East, owning a £500k home, which is often smaller than a £300k home up north, does not make you rich. This is partially about trying to win over people who call middle-class southerners 'the London elite'. Has Starmer not realised that no amount of red meat can satisfy the rabid? They just grow bigger and stronger on it. Starmer and co are reluctant to penalise the super-rich who can get rich after their term in office or use their media clout to hound them out. BrotherChe Economic warning More adjusting of the net curtains while the house crumbles… Prof Richard Wolff and Analyst Sean Foo on China dumping increasingly worthless US bonds, but after Japan and China, the UK, the third largest holder of worthless bonds, is buying more – collapse is on the horizon, especially as Trump blunders with little understanding of the impact: Meanwhile, here in the UK, our chancellor is buying US Treasury Bonds like there's no tomorrow! At the same time, we are told we are so skint we'll have to cut back on help for the disabled. This will wreck our economy – all to try and crawl to Trump, who hates them! Dolphins Impact on pensioners A property tax doesn't take account of residents' incomes. Four wage-earners in a £499k property would not pay, but a couple of pensioners in a £501k property would have to starve – and freeze – to death. Lucy Lastic Property as investment People look to accumulate profit in house ownership to compensate for low wages. If their gaff is going up by 5 per cent year on year, they're quids in and can retire in style. Lots of people own houses as a business – what percentage of homeowners actually live in that home? Stop anyone owning more than one house, especially foreign buyers. We are rife with investors dispossessing us here. covergo Want to share your views
Reuters
2 minutes ago
- Reuters
Breakingviews - European defence stocks send false peace signal
LONDON, Aug 19 (Reuters Breakingviews) - Suppliers of tanks, jets and artillery shells tend to benefit from wars – and do less well when the fighting stops. In theory, that makes shares in European defence groups like Rheinmetall ( opens new tab, Renk ( opens new tab, Leonardo ( opens new tab and others a rough proxy for how well the Ukraine peace talks are going. Yet there are hazards of taking this approach too far – as a major stock move on Tuesday shows. Eight big European military suppliers, collectively worth $307 billion when markets closed on Monday, lost over $15 billion or 5% of their equity value by midmorning London time the following day. Worst hit were Germany's $7 billion Renk, which makes tank gearboxes, and Italy's $30 billion Leonardo, known for helicopters and surveillance systems. Both were down about 8% at one point. At first glance that might seem like a vindication of U.S. President Donald Trump's self-professed efforts to end the conflict in Eastern Europe. In recent days he has met with Russian President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskiy, as well as a host of other interested leaders including German Chancellor Friedrich Merz, French President Emmanuel Macron and British Prime Minister Keir Starmer. A stock slide for the defence groups implies lower demand for everything from Rheinmetall tanks to BAE Systems' (BAES.L), opens new tab jets, suggesting a chance of less future fighting after the conflabs. Yet that account is hard to reconcile with what happened at the meetings, which produced no clear commitments on security guarantees for Ukraine, or any evidence that Putin is ready to even contemplate a ceasefire. At best, the only real justification for higher peace hopes might be that things didn't spiral out of control as they did in late February, when a heated exchange between Trump, Zelenskiy and U.S. Vice President JD Vance sent European defence stocks soaring. The market moves probably reflect high expectations as much as diplomatic reality. Renk, Leonardo, Hensoldt ( opens new tab, Babcock International (BAB.L), opens new tab, Saab ( opens new tab, Rheinmetall, Thales ( opens new tab and BAE Systems on average traded at over 30 times 12-month forward earnings at the end of last week. That's almost double their five-year average, putting the European military suppliers roughly on a par with Microsoft (MSFT.O), opens new tab and Nvidia (NVDA.O), opens new tab in terms of stock-market ratings. Citigroup analysts calculated in early August that Hensoldt, Renk and Saab required a 4 to 5.5 times increase in operating profit between 2025 and 2034 to justify their share prices, which was roughly twice as fast as the same brokers estimated that government defence procurement budgets would grow over the same period. Even after Tuesday's slight wobble, then, the sector's valuations still imply soaring European defence spending. In other words, the stock drop says more about these companies' toppy valuations than it does about a meaningful chance of peace. Follow Liam Proud on Bluesky, opens new tab and LinkedIn, opens new tab.
Telegraph
32 minutes ago
- Telegraph
How ‘broken' Soho House plans to get its glamour back
When Prince Harry and Meghan Markle first met on a blind date in 2016, they chose the discreet location of Dean Street Townhouse, an outpost of private members' club Soho House, for their clandestine rendezvous. The date highlighted the enticingly exclusive appeal of the club, a place where David Beckham, Kate Moss and Leonoardo DiCaprio rubbed shoulders with a host of other A-listers. Such was the buzz around the brand a decade ago that a former director once claimed it had repeatedly denied Kim Kardashian membership because its admittance was too selective. Yet over the past few years, Soho House's glamorous star has faded. Its rapid expansion – it now boasts a not-so-exclusive network of almost 50 locations – as well as a troubled stock market flotation and criticism of overcrowding, has led to claims the brand had lost its way. On Monday, Soho House made its most ambitious move yet to get its mojo back, striking a $1.8bn (£1.3bn) takeover deal led by one of the largest hotel operators in the US. The takeover is expected to breathe new life into the private members' club as it fights to restore exclusivity to its global brand, but success is not guaranteed – can Soho House become the playground of the rich and famous once again? Soho House was launched by restaurateur Nick Jones from a single townhouse on Soho's Greek Street in 1995, with the aim of providing an exclusive refuge for the great and the good of London's creative industries. In the intervening decades, the group jettisoned its more stringent membership requirements and ballooned in size. It now has around 268,000 members in 46 clubs around the globe. Wall Street woes Yet this expansion has come with growing pains as members began to complain of clubs becoming too full, leading to lacklustre service. Soho House briefly stopped accepting new members in London, New York and Los Angeles last year. Jones, who is married to BBC presenter Kirsty Young, said the group was focused on 'making sure our houses don't feel too busy '. It is not just members who have been critical of the company. Soho House has also had a troubled relationship with Wall Street since its listing in 2021 at a valuation of $2.8bn. The company's share price fell sharply during its life as a listed company, prompting Ron Burkle, its billionaire chairman, to complain that the market had undervalued the group and that it had 'all the costs of being a public company with few benefits'. Perhaps most damaging was Soho House's clash with New York-based short seller GlassHouse, which published a damning criticism of the company's 'broken business model and terrible accounting'. Bosses said the report included 'factual inaccuracies, analytical errors and false and misleading statements'. The company has also faced pressure from Third Point, the hedge fund run by activist Dan Loeb, to seek outside investors who would deliver a higher valuation for the business. Burkle appears to have taken heed of the activist's demands, and the chain will now resume life as a private company in a deal spearheaded by MCR Hotels, a sprawling group that operates 25,000 hotel rooms. The $9-per-share deal, which values Soho House at around $1.8bn, represents an 83pc premium compared to the company's stock price at the end of last year. However, it is well below the $14-per-share price tag Soho House was given at its New York stock market float. Other investors in the deal to take the company private include Apollo Global Management and Goldman Sachs, as well as a consortium led by actor Ashton Kutcher. Burkle will roll over his existing stake under the terms of the transactions, as will Jones, as well as restaurateur Richard Caring. Tyler Morse, MCR's chief executive, will become deputy chairman of Soho House, while Kutcher will also join the board. Under Andrew Carnie, who took over as chief executive from Jones in 2022, Soho House has been looking to refocus its efforts on quality. It has upgraded its food and drink offering, introducing new wellness facilities and refurbishing some of its sites. It has invested more in events and experiences such as its London festival and pop-up hospitality suites at Formula One races, while it has recently opened exclusive new outposts, including Soho Mews House and Soho Farmhouse Ibiza. Speaking to the Telegraph earlier this year, Carnie described the club's approach as 'global but local'. 'The goal is always that wherever you are in the world, you walk in and you feel Soho House', he said. 'Feel the environment that we've created, the energy, the members, the way we serve our drinks, the lighting and the music. 'We have a lot of brand principles, but we do want you to have a different aesthetic experience in these houses.' Soho House has also cashed in on its popular homeware brand, which it is increasingly championing within its members' clubs with showrooms. The company now sells more than 30,000 units of furniture a year, up from 1,800 in 2019. There are signs that the turnaround efforts are starting to pay off. Soho House recently posted its first run of consecutive quarterly profits following three decades in the red. In an update published earlier this month, the company said operating profit stood at just under $60m in the three months to July – up from $35m in the previous quarter – while revenues grew thanks to increased membership and higher in-house food and drink sales. The question now is how Soho House will harness its new lease of life away from the glare of the public markets. The next chapter Industry experts believe the step to go private will be beneficial for bosses. Ted Schama, the founder of advisory group One Voice Hospitality, says it will give the company the 'autonomy to pick and choose roadmaps for growth and – during that period – not be penalised for investment and not showing profit'. In MCR hotels, Soho House has a new owner who is unafraid to take on big projects. After buying the BT Tower for £275m last year, the US company has outlined plans to transform the Grade II-listed landmark into a hotel. The group also owns a string of signature sites, including the famous 1960s-themed TWA Hotel at JFK Airport, as well as the High Line Hotel and the Gramercy Park Hotel in New York. Schama says that, with Soho House, MCR is gaining a business that already has an estate of 'blended' sites. Soho House's membership clubs are often located alongside office space – Soho Works – and come with hotel rooms, restaurants and swimming pools. 'Blended offerings are where it's at,' he says. 'I think there is tremendous appeal in that regard on a global scale.' Meanwhile, private ownership will undoubtedly liberate Soho House bosses from the expensive and time-consuming requirements of life on the stock market. Members say they are hopeful this heralds the start of a return to form for the company. One person who has been a Soho House member for the past 20 years says they thought it 'never should have been listed', adding: 'Reporting quarterly earnings is not exactly cool.' Already, there have been signs that it is rekindling its reputation as the place to be seen. In June, Dua Lipa hosted an after-party at Soho House's White City club in West London following her sold-out Wembley shows. With around 111,000 people on a waiting list for membership, cultivating this exclusivity is likely to require a disciplined approach to growth. In a memo to members on Monday, Carnie said the takeover would allow the company to 'think long-term, invest where it matters most, and keep strengthening what makes the houses and our membership community so special'. However, the Soho House boss was keen to stress that exclusivity will be at the heart of this plan. 'This next chapter is about taking the best of what we've built and making it better for our members around the world', he said. What this would mean is that 'membership feels just as special in the years ahead as it does today'.
