“Unprecedented space across the West End”: REIT Shaftesbury PLC grapples with a new reality.
By Nick Corbishley, for WOLF STREET:
In this virus crisis, owning the wrong type of real estate (e.g. brick-and-mortar retail) or real estate in the wrong type of area (e.g. apartments in neighborhoods that are heavily dependent on tourism) can have dire consequences, especially when there’s a blanket ban on evictions. UK listed landlord Shaftesbury is hugely exposed to both, and its shares have dropped 47% from their peak in October 2017.
Not only does it own a vast portfolio of all the wrong kinds of property at the wrong time (retail, leisure and hospitality), many of whose tenants stopped paying rent months ago, but almost all of its real estate — including its residential properties — are in London’s West End, which is at the epicenter of the UK’s pandemic fallout.
To weather the storm this far, Shaftesbury has raised £307 million of fresh capital in a deeply discounted rights issue. It has also increased debt by 10% and was given a string of waivers from its lenders when it was on the verge of breaking some of its debt covenants.
And it has slashed the value of its property portfolio by £700 million, or 18%, to £3.15 billion, as it reported in its 2020 end of year results, published this week. This comes just as more pandemic restrictions are set to hit London, which will put even more pressure on Shaftesbury’s tenants.
The blame for this write-down can be placed on its huge holdings of bars, restaurants, leisure and retail properties, many of which keep having to shutter during lockdowns, and the “exceptional increase” in vacant apartments, as many younger tenants have decided to work or study from family homes. By September, 137 of its 624 apartments were lying empty: a vacancy rate of 22%. There is, Shaftesbury says, “unprecedented space across the West End”:
“Typically, our 624 apartments are occupied by those seeking a base in the West End for either work or study, and are particularly popular with younger people from overseas. As a result of the first lockdown restrictions, many tenants chose to return home, leaving flats unoccupied. With the continuing uncertainty, many chose not to return to the UK for the time being and vacated permanently.”
While many international students and young workers have headed back home, fewer are arriving in London to replace them. Covid-induced lockdowns, travel restrictions and border controls have battered migration flows in most parts of the world. In the first half of 2020, the number of visas issued by OECD countries slumped by 46% compared with the same period in 2019. This is the largest drop ever recorded. In the UK, the number of visas issued in the first three quarters of 2020 slumped by around 70%, reports real estate agency Savills.
For the first time in a very long time, net migration to the UK is falling sharply. And that could have a major impact on the rental market, particularly in London. Until this year, uninterrupted net migration to the UK — even after Brexit stymied migration from the EU — played a vital role in sustaining London’s growth. Together with the “natural increase” in population (i.e. local residents having babies), it helped more than offset the flow of people out of London to cheaper, less densely populated parts of the UK, or other parts of the world. As a result, the city’s population increased by an average of 102,000 per year between 2004/05 and 2018/19, according to the UK Office for National Statistics.
For the residential property sector, uninterrupted net migration fueled higher demand, particularly in the prime rental market, which typically has a higher share of international and corporate tenants than the sales market. Nowhere is this truer than in central London. But now that the tide has turned and fewer high net worth tenants are arriving from abroad while many others are heading home, London’s prime rental market is feeling the heat.
Rents in prime central London fell by 10.5% in the year to November, pushed down by high levels of supply and lower levels of demand, according to real estate agency Knight Frank. In prime outer London, which is less built up than central London, median rents fell 9%. These were the largest drops since the global financial crisis although they are still only around half as steep as 2008/09.
The declines were less pronounced in south-west London, “where supply has not built up to the same degree.” In more central areas, the combination of a glut of properties and weaker demand has driven rents lower. In the case of London’s West End, where Shaftesbury has most of its residential properties, the glut has been exacerbated by the appearance of thousands of former short-stay apartments on the long-stay market, as landlords who used to rent to tourists on platforms such as Airbnb begin looking elsewhere for business.
“Across the West End, many landlords have been attempting to find long-term tenants,” says Shaftesbury. “This has resulted in a near-term increase in availability of apartments to let, causing downward pressure on rents.”
But Shaftesbury says: the “long-term structural shortage of accommodation” in London’s West End, which should help to ensure that the current glut is just a “short-term challenge.” That’s the hope. The landlord knows it’s in this for the long haul, particularly given its outsize exposure to the UK’s long-struggling brick-and-mortar retail sector as well as to many small and mid-size hospitality and leisure businesses, which have borne the brunt of the government’s lockdown measures.
“It certainly won’t all be over by Christmas, and may even not all be over by next Christmas,” Shaftebury’s CEO Brian Bickell said. By Nick Corbishley, for WOLF STREET.
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Folks will put up with a bunch to live in a city with certain amenities, opportunities and culture.
Take away that – why stay?
Terror attacks are “part and parcel of living in a big city…”
— Sadiq Khan, mayor of London
You do realize that nothing happening in London even vaguely approaches your typical Chicago weekend.
The Vegas shooter (a white guy btw) probably took out as many as London’s since WWII. Part of his easily obtained (in the US) was a ‘bump stock’ which converts the semi-auto into a machine gun.
But 3 million Hong Kongers will soon descend on the UK so everything will be all right …. right?
Not the UK, Australia
Is that for real?
Remains to be seen. Even before COVID-19 the Australian economy was a basket case.
The government continues to ignore the real damage caused by global warming and last season’s fires. They act as if only a few cafés and houses have burnt down whereas town after town, village after village, and parts of good sized cities have burnt down, large parts of rail and electricity infrastructure has been reduced to cinders, and we will not even get into the massive damage to agriculture and the environment.
Even before that the Australian government started to pass “bail-in legislation” to seize people’s bank accounts (what is left of them at near zero interest rates). Viable high technology businesses get taxed to death so they leave. Fundamentally uneconomic agricultural interests and fossil fuel companies get massive government subsidies. We have a federal government that does not believe in science, engineering, or mathematics. Several of the state governments have a similar level of ignorant superstitions.
The banks are on the brink of collapse with a substantial fraction of their mortgage “assets” in default. Huge tracts of commercial and industrial real-estate spaces were vacant even before the COVID-19 viral plague. Office buildings are “poodle cut” (tenants on the top and bottom floors, empty in the middle). High rise apartment buildings are mostly vacant, mostly clad in flammable materials, and mostly with serious structural integrity problems.
Farmers, of course, stand no chance of paying back their debts to the banks no matter how many times the banks reassess and inflate real-estate valuations. Most, now former, agricultural areas, are plagued now with either floods or fires, sometimes both.
Ocean storms have ever increasing intensities seriously disrupting shipping and eroding coastlines. Coupled with rising sea levels the “entertainment” has just begun. Things will never ever go back to what they used to be. Disaster followed by disaster is the “new normal”.
You have a very interesting story to tell. I am sure it would be of interest to wolf street readers. Maybe team up with Lee from Melbourne and give us all a good rundown what’s going on in the land of Oz.
You forgot f*cking with china and being surprised they don’t buy your wine anymore.
What stan6565 said. Wolf?
I’m not interested in posting political diatribes. But if anyone in Australia wants to discuss topics on the Australian economy, they can, as always, contact me.
My apologies, I did not wish to incite a political diatribe. I just thought that Oz/NZ have many parallels to what’s happening in USA and Europe and a good detailed commentary may have been of interest.
Say, if Nick Corbishley had a cousin over there to tell us a story. That type of thing.
Nice rant ram, but that’s all it is.
Australia is doing very well at the moment and there are no, or very little, restrictions and haven’t been for months in most of the country.
The impact of Global Warming on Australia is also much overstated.
More people died in bushfires in Australia in 1983 & 2009 than did a year ago – despite the larger population today!
Australia is doing fine and I hope ram is hiding in his basement to ‘stay safe’.
Some amount of Hong Kongers will come, but, it’s mainly the older generations eligible. If the parents and grandparents going, could somehow enable the younger ones to leave China; Hong Kong could actually start to empty out. Recessions in both places would have some effect.
If the UK really allowed several million Hong Kongers to move, the next question is jobs and money. A bit over half of Hong Kongers own their apartments (including those with mortgages), which are very expensive. I could see a scenario where Hong Kongers sell their homes to mainlanders and use that money to move to London. Not sure how many it would take to save London housing market, but, it seems possible. If it only took a few hundred thousand, it could be a legitimate strategy. The next question is the CCP response, would they allow it? Would they fully end the 2 systems policy in response? People moving out of Hong Kong could quickly end the 2 systems policy and then greatly increase those leaving in response to that.
Right now, brexit is set to wreck the UK, it would be unprecedented, but, not impossible that a couple of million Hong Kongers could save UK economy. More realisticly though, a few hundred thousand Hong Kongers could move to London temporarily saving housing market, but, UK crashes later on.
To the UK?
The older have money and don’t need work. They will go to somewhere where the weather is nice. My guess one of the Filipino “holiday” islands. Moving the maid wont be a problem.
It is obvious that Hong Kong will empty out. But not to the West but mainly to Shenzen. CCP has never had a problem with Chinese leaving China. The absorption potential (and racism) of the West is just to small for that. The European communist states had a problem with fleeing because it was a meaningful share of the population. Especially of the most productive.
ps. To really empty out you need disorder but a take over of HK would create order so no need to flee
Did you see the HK umbrella protests? And please don’t call them (like a poster on this site) ‘student protests’. They were the largest assemblies per capita in history.
No doubt HK under the CCP would be orderly as was Germany 33 -45.
It’s the kind of ‘order’ free people don’t want.
As for the CCP buying out HK RE, it would have to be in yuan.
I was in HK during the umbrella protest. (visiting a friend/holiday). I walked the protest area. It wasn’t ten meters but it wasn’t a mile either. I wasn’t impressed and it did certainly have an (eternal) student vibe. HK island is not a place to have mass demonstrations. Streets etc. are to narrow. But they look massive on tv.
I’m not saying China will buy out HK real estate. What i say is that the people of HK will move to better work and larger, newer apartments in Shenzen. The only advantage HK has on Shenzen is Filipino maids
The quality of construction in the mainland is vastly lower than Hong Kong. So no they won’t give up their HK residences to go to Shenzen.
The reason they are fleeing is to escape the CCP, they aren’t going to move 20 miles upwards right into them.
As for where they will actually move, the rich will have their choice of many places across the world, they will likely choose a good place to do business though. Having citizenship in a country directly next to the EU is a good possibility.
Despite any claims to the contrary, people in China know the construction quality sucks on the mainland and that it’s much better in Hong Kong. Most people in China can’t get their money out of China and must invest in the real estate market or a very shady Chinese stock market.
The real question is whether the CCP will allow mainlanders to buy up Hong Kong real estate and allow the average person in Hong Kong enough money to move more easily outwards. For the more average upper 50% who own their residence (possibly with a mortgage), they can’t simply move anywhere and the UK is a nice upgrade over the CCP.
The CCP might allow this as the Hong Kongers moving, will make the takeover smoother. Or they may not as everyone leaving could make the CCP look bad. If they do allow mainlanders to buy up HK property, i could see HK property prices rise sharply.
It’s also important to remember that Hong Kong is one of the Jiang Zemin factions last bases of power, so that is a major background event that will likely decide Hong Kong’s future. It’s hard to say, because, of this what the Xi faction will do.
The quality of a new apartment must be absolutely horrendous to be worse than a tiny 40 year old apartment in HK.
In China you can say almost anything as long as you do it quiet. In that it isn’t that much difference to HK in which you can say anything about HK oligarchs, the real rulers of HK, as long as you do it (very) quiet. 99.99% of HK population has nothing to fear from China. It is likely that the Anglosphere would be more because of anti Chinese feelings (see senator Cruz). So moving 20 miles north is an option. In fact i expect a movement fro Chinse Americans to China
Why moving to Britain is a bad option is something that the future will decide but it is very likely that current Brits can very easily go to the EU, which makes new Brits specially and difficult and without political pressure from Westminster to change that. Buying a Maltese passport is easier and cheaper with far fewer problems. And the weather in Malta is a thousand times better.
In my country you have lot of HK-ers that operate “Chinese” restaurants, they fled the political problems of HK in the 70’s. They worked very hard. Their kids all ended up bounties and they are all financial losers compared to those that stayed in HK and just bought an apartment.
I think the government of China whats to see HK go into a slow decline to average. A few front page articles about some HK independence brown shirts that kick a mainlander into hospital is enough to stop most money going to HK. Add some anti triad measurements & easier extradition and the real estate market of HK will deflate
The quality of construction on the mainland for buildings and many other things has fallen quite a bit over the last 15 years-ish (it wasn’t very good before that either). Just how bad is it? Bad, but, can’t be fully answered, because, of the CCP’s total control of information. There is a reason the term tofu building exists. A properly constructed wood or concrete building with proper maintenance can last hundreds of years. An unknown percentage of buildings over the last 15ish plus years built in China are very shoddy, they are incorrectly designed, and often have many lovely traits such as the use of untreated sea sand for its concrete mix, which corrodes the steel support beams.
From the early 90s until the Xi faction takeover starting about 2013 (the effects of Xi on everyday Chinese, took several more years to become apparent), life was improving every year in China. I can easily see how that many lower income Hong Kongers could end up better off on the mainland or anywhere besides HK. But, the tide is turning in China. The Xi faction wants total contol and will plunder the Chinese population and everyone else they can. Many Chinese have caught wind of this, but, are powerless. The Hong Kongers who grew up in a place with free flow of information can see the ways things are going and many will flee. China passed the point of no return, with their exploiitation of a pandemic, they caused. With all the propagannda, most Chinese and some foreigners can believe a very twisted worldview the CCP puts forth.
The top Hong Kongers can move to quite a few places. The more average Hong Konger is more restricted, the easiest places to move to, even if not the best are likely to be the most common. It doesn’t matter how good Hong Kong was or wasn’t, the future looks grim and many were just granted a escape option.
Needing to rebuild all the building that have been but up in the last 15 years is not a bug but a feature. Besides it is not the only place in the world where this is true. My prediction is that every building* in my country build between 1945 and 2000 will be demolished and rebuild. builders salivate on that thought.
China is near a first country in development so future growth is harder but i don’t see problems for the next 15 year for the central government. But that is seen from the outside. And 2021 is a revolution year in which an awful lot of countries will experience revolts. My prediction for South America is that only country that will have the same leadership in 2023 as in 2019/2020 will be Venezuela. And South America is not the only
region in which trouble is flaring up
* Outside some historic preservation.
You are massively misinformed.
People in HK know and value their freedom, and not just the students. Public surveys show a clear and strong majority support in HK for democratic rule, and the protests, as others have noted, have included more than 10% of the entire population of HK. It would be the equivalent of 30 million BLM protesting in the US.
And your comment about being able to say anything you want in Communist China is BS. Online is censored heavily and people have been illegally jailed for reasons that were never explained to them in large numbers. Hundreds of thousands of Uighurs are in illegal concentration camps in the west of China because of their religion and ethnicity. I have family from China and have spent time both there and in HK and can say confidently that HK doesn’t want anything to do with mainland Chinese rule.
You also, have to add in the 950,000 increase in unemployment which could be 3 million after furlough ends in April…Interesting times
Not a good time to have an exposed Shaftesbury.
I wish I wanted to buy in some city right now, but I have no desire. The reverse will happen when the vax takes hold. Young city dwellers can’t live in the suburbs happily… too boring. I imagine one hard snow will send the Tahoe dwellers back to San Fran once they experience 8 hours on a closed highway.
So true , The Tahoe migration is laughable. Short term euphoria for long term weather pain. I know plenty people who moved their only to discover that being in a warmed hut in a vapid atmosphere is dull once you’ve exhausted skiing and snow shoeing as a recreation.
Some will figure out how to manage a balanced lifestyle up there but most will gradually move back to the cheap city where rents are down 30-40% and the food and nightlife is 5x better.
Let’s be honest if people really loved life in the mountain you’d see millions of people in Tahoe and a deserted bay. But the reality is most people prefer mild weather over being in a snow scape for 6months of the year
You just explained why houses turn over so quickly where I live, in North Idaho. People visit the area in the summer, fall in love, move here and then…winter. All 6.5 months of it. And winter days are short and nights are long. Yes, there’s skiing, but…
The realtors love it! They’ll sell you a house and then sell it for you in a couple years.
A racket. Advice to folks: don’t move up toward the 49th parallel unless you’ve experienced real winters.
This renter matter falls under topics related to: We make the beds we sleep in
Also See, The Great Smog: “In 1952, Britain was only gradually recovering from the destruction and debt burden of the Second World War, and many essentials, including coal, remained rationed. Yet just before the notorious fog disaster hit London, Churchill’s government had announced that the poorest and most polluting grade of coal (known as “nutty slack”) could be obtained without ration coupons. Spurred by official advertising that encouraged people to stock up on fuel and burn it without the constraints that rationing had imposed, consumption shot up.”
It was unbelievably horrible that year. My mother almost fell into a canal in that smog, having completely lost her way on a familiar route, and was only stopped by an old man with a lamp – and they almost walked straight into him it was so thick!
That sounds like right out of Charles Dickens’ Hard Times.
Totally Dickens, and from the time when London was still a British city……
So, in 1952 they UK Government were hankering for a revival of Victorian Times and here were in 2020, and they are dreaming fondly about WWII?
Dang those Brits wanting to stay warm.
I think you’ll find that ‘advertising’ means information, not creating an artificial demand. It is not necessary to stimulate demand for a previously rationed essential.
BTW: Britain was not a recipient of Marshall Plan aid but at the same time the USSR reneged on its share of feeding starving Germany, a not quite starving UK did help. Bread wasn’t rationed during the war but was for a while after. At Princess Elizabeth’s wedding, many of the gifts were of food (much later distributed)
Unless I am misinterpreting the comment, the idea that in 52 it was reprehensible to burn sub- standard coal is one of the silliest I’ve read.
Tourism sector suddenly found itself in the middle of a horror movie. As well as the concept of secured income.
Imho, the mass tourism was one of the best inventions of XXth century – safe and comfortable. With video streaming.
I see the similar story coming to all USA coastal expensive cities over time.
Already happening in San Francisco.
But people around me in San Diego think we are special and this time is different! :-)
Interestingly, as the stock market shoots higher, with an attitude that risk no longer matters — these real, down-to-Earth examples of pandemic failures will surface around the globe, and the investors needed for those future investments will be far more aware of losing cash. I expect that in due time, stocks will seem less and less to be risk free casinos where nothing can fail!
As long as “Markets” go up, the risk is zero, and “Markets” will go up!
Only losers think about the underlying reality, f.ex. the Paris stock exchange was still going up one year after Hitler invaded France.
Once we have had 3 or perhaps 4, 5 or 6, solid Minus 30% down days, weeks or months THEN everything will be a UNIVERSE of risks and bad outcomes. That is also the best time to buy.
The FED & Friends won’t allow it to happen, though. We can’t even do regular banckrupticies these days. Thus “Markets” will go higher.
You might be right, but when people panic I don’t think there is much that can be done without massive intervention such as closing the market or throttling bank withdrawals.
Everyone knows if you are not one of the first out the theater door you are doomed.
“It was the best of times, it was the worst of times.” The stock market is not one single entity. The gains in the market come from companies that benefit from the current economy: on-line services, biopharmaceuticals, cleaning products, etc. Look at the stock prices for energy, airlines, retail, REITs, hospitality, and utilities. People holding those stocks are getting a great lesson in risk.
I believe the biggest mistake people are making is paying too much for new technology growth. All company growth declines to nominal GDP growth plus a percent or two if you are fortunate. If the future is like the past the stock prices of the highest fliers will collapse to dust with maybe 10% of them being a successful long term investment.
Great review, Nick, thank you.
Same can be said of highest-primest commercial property, if one strolls through Mayfair and St James’s, shuttered shopfronts are a plenty. It is amazing to look at the cigar importers and chocolate specialists shopfronts, hitherto brimming with most expensive hedgie suits, switched off and dull. More than half of cafes and restaurants in Shepherds Market are shuttered up. Hilton hotel at the bottom end of Park Lane, shut.
Strangely enough, a private jet planes rental place next door to hilton, reports brisk trade.
Government encouraged WFH, coupled with obligatory c19 related shutdowns, has brought the whole show to a standstill. Only those landlords “happy” to drop their rates by 10 or 20 or more % can count on keeping their tenants through next 12 months.
COVID related, 100%. Brexit related, 0%.
Another great article. Would you be willing to offer your thoughts on how London will look a year from now, if trends continue?
As an accountant running an accountancy practice I can assure you that the UK government is in for a shock regarding its future deficit.
Let me tell you some of the scams going on with the Corona Virus “pandemonium” in the financial world, here in the UK.
Bounce Back Loan:
This is a loan that the government give to companies to help them through the Corona Virus.
It is basically a loan of 25% of Turnover (Revenue), interest free for the first year and then 2.5% guaranteed by the government to the high street banks.
I can tell you that I can see company owner/directors planning for their company to go bust at the right time. I have seen one use his £50,000 bounce back loan to by a classic mustang to cruise around in while there are no available contracts.
I have seen another draw out the monies within three days of the bounce back money deposited into his company account draw it out and take it to his homeland, Romania to build a house.
Furlough – 80% of gross salary
There are many limited companies in the UK owned by East Europeans.
To avoid making profits on paper and hence have to pay Corporation Tax had relatives and friends from their countries come to the UK to obtain a National Insurance number and then been put on the payroll of the UK company. They immediately returned back to their East European country. The benefit for the East European owner of the UK company is that they can pay them £11,520 a year on paper; draw that cash out of the bank and no income tax and negligible NI to pay as they are using the £12,500 Personal Allowance. The East European that has actually never physically worked for the Ltd company, living back in his homeland will be entitled to the UK state pension after he has been on the UK payroll for 10 years. This all for a £30 return flight on a budget airline.
Of course now East European owner of the company is receiving furlough 80% of £960 per month for all these employees.
Even the East Europeans that were officially working in the UK, a lot went back to Poland etc. and are receiving 80% of the gross salary while they were back in Poland, some of which have no intention of coming back. And if they do want to come to the UK can be given a P45 and sign on immediately getting UK benefits.
That is the reason a lot of us laugh at the UK government and MSM when they tell us that these immigrants have come to the UK to help the UK economy.
Not the fact that these immigrants are more clued up than most UK citizens on how to milk the state and the monies they receive are never spent in the UK but taken back to their homeland.
No immigrant in the UK will actually add anything to the UK economy unless they gross £30,000 per annum and pay all the tax on it.
Your story is applicable to the Dutch too. It is known for years now how (mainly Polish) use the Dutch benefit system to live well in their homeland. There was a national riot about it in parliament. But it’s still not fixed. So called “because of treaties and EU rules”.
Brexit will relieve the UK of some if these EU rackets. But i’m pessimistic if it will compensate for loosing other legit business.
We have just given 130 London apartments back that were airbnbs. Tbh the last few years were not profitable as everyone was doing it. Anything we made going eaten up in the low winter season.
The UK government, representing a sovereign nation and all that stuff, made the rules, so they just have got to be adult about it and suck it all up. We occasionally hear the same whining in Denmark.
All that they have to do is:
1) Change the law,
2) Apply the changed laws equally to all EU-citizens,
However, the “Change” part always stop on the impact assesment of “Stage 2”, because of the influence of many home-grown special interests, who would then somehow lose out, or they will not just accept being put on the same level as everyone else are!
In my case, I look forward to relishing the shrill squealing of the Danish unions, employers and social democrats over minimum wages and employment standards, when the EU crams them down the throat of the Danish government. Which they will once the UK is finally gone.
We don’t actually have these things in Denmark, they are agreed by collective agreements between unions and employers. This is Widely abused by employers registering companies in Poland and Romania, then hiring people locally, and then posting them in Denmark, at Polish/Romanian rated pay, working and living conditions, All Shit!
The unions tolerate this abuse because their leaders like to sit in smoky rooms and be important to people when negotiating with employers, who also like this because all wages – except those of “the leadership” – shall be Zero or as close as possible.
Normal people see safety, wages, everything being undercut by our own people and no action taken, because all of those with their snout in the trough agreeing on not rocking the table the trough is placed on.
The stupid unions have had 30+ years to come up with “something for everyone”, they sat on their fat ass instead, and now someone else is coming up with something for them via Brussels!
Union leaders, the upper ranks, are often among the most corrupt of all: they claim to dislike capitalists, but it’s just that they get an even bigger cut, mere envy……
It seems that the real problem of parasites fleecing their welcoming adoptive countries is not too dissimilar in Denmark and U.K..
The same parasitising problem exists equally in Germany Italy France and so on.
I have for years now held a view that the governing classes all around the world are clueless, corrupt, dumb and rotten. Definitely so in the whole of “western world”. Such people are not at all likely to resolve this parasitism, which will eventually lead to the death of the host organism (welcoming adoptive countries).
How to fix the problem?
To be or not to be?
You call the wrong people parasites.
Thanks for those interesting details. Why do you not report these people? Silly, I know…..
I have to say that, although the Polish builder I employed was a fine and upstanding man and a hard worker, like all his team, we did have some interesting chats about what some other Poles got up to.
He also despised British building inspectors as incompetent and corrupt – he even rated Russian inspectors as more competent having worked there a few years.
But he was an honest man who prided himself on his work. When I found a very small error, which I was happy to over-look, he tore the whole ceiling down and did it again because it troubled him to have made a mistake.
In the end, it all comes down to character.
On Russian building inspecting and processes, a few years ago a fella I vaguely knew from university, a structural engineer, was asked to give permit to a shittily made building. He wouldn’t.
They insisted, he still wouldn’t. He went back to his home country in a casket.
The price of being professional.
I’m also an accountant and tax advisor working in practice, and I don’t know why you would shine the light on fraud committed by Eastern Europeans. I have plenty of client’s misusing the bounce back loan – deposits for houses, flash cars etc and they are all Brits. At the end of the day everyone acts with self interest, irrespective of your nationality.
The bounce back loans, along with virtually every other government ‘scheme’ in existence, is susceptible to fraud and misuse. Take the research and development SME scheme here in the UK. For a number of years now the UK government has been offering cash for 230% of ‘qualifying R&D expenditure’ which ‘is spent on advancing science or technology’. I.e. if you spend £100k on R&D expenditure, the government will give you £230k at the end of the year. The institute of chartered accountants did a report on misuse of the R&D scheme that is ongoing. My favourite example was restaurants were making R&D claims because the chefs experimented with different ways to cook a steak.
Some say the best use of money is black market in a corrupt country as two parties make a free exchange of goods for cash out of sight.
Probably the worse use of money is a large stimulus or safety net program coming from a large central government as it rains OPM down on the deserving and the undeserving. Maybe charity program is always going to have a certain amount of abuse.
Poor London, we’re so lucky this isn’t happening in even greater numbers in other liberal cities……
Shocking that they fled the city on public & private transportation.