in the back
How to milk a Jersey cash cow
Build-to-rent, Issue 1435
“THERE has been a housing shortage in this country for decades,” said chancellor Phillip Hammond while unveiling a £3bn fund to kick-start house building at the Tory party conference last year, “and this government is determined to take action to tackle it.”

Two thirds of this pot, the Home Building Fund, is actually old money re-packaged from three pre-existing funds, including the build-to-rent fund set up by George Osborne in 2012. The fate of this money suggests that some of the action Hammond might want to take is to stop any more of it heading offshore.

Figures disclosed to the Eye under freedom of information reveal that of £600m lent to property developers in the past three years under build-to-rent, a total of £167m – more than a quarter of all loans – went directly to companies in the Channel Island tax havens of Jersey and Guernsey, where any gains made are likely to escape tax. These include:

  • £7.9m to redevelop three derelict tower blocks in the Manchester districts of Ancoats and New Islington. Property developer Nigel Rawlings said flats in his groovy development, dubbed “Tribe”, are for those “looking for a new approach to rental apartments”. The taxpayer loan went to landowners Ancoats Residential Holdings Ltd, based in Guernsey.

  • £22.5m to Manchester Life Development Company Ltd to build a luxury apartment block by the canal in New Islington. Manchester Life is a joint venture controlled by Manchester city council and Man City FC owner Abu Dhabi United Group, the latter via Jersey company Loom Holdings Ltd. The loan was to landowners Silk Glass Development Ltd, another Jersey company.

  • £45m to build a 45-storey residential skyscraper at Newington Butts in the London borough of Southwark. The development, which will include a “sky lounge” and gym on the top floor, is the brain child of Realstar Capital LLP, headed by Canadian businessmen Jonas and Ryan Prince. The development site is owned by Sadiq Khan’s Greater London Authority but the loan was paid to Jersey company Dylan (Jersey) Ltd in March last year.

  • £25.3m to Essential Living, a self-described “London-based” property developer, to build three high-rise apartment blocks: Archway Tower in Islington, acquired in 2013 via Jersey company Essential Living (Archway) Ltd; Farriers House in Bethnal Green, acquired in 2013 via Essential Living (3CL) Ltd, also in Jersey; and Berkshire House in Maidenhead, acquired in 2012 via Essential Living (Maidenhead) Ltd, yet another Jersey company. The loans went directly to these offshore companies.

  • £67m to Legal & General Capital to build 300 apartments on the Ferry Lane industrial estate in Walthamstow as part of a regeneration of east London. The loan went to Walthamstow Property Unit Trust, based in, er, Jersey.
The Homes and Communities Agency, which decides who gets loans, tells the Eye that build-to-rent rules “permit the HCA to deal with companies based in offshore territories”. As for checking the credentials of those it works with, the agency “adheres to robust risk-based due diligence procedures across all its recoverable lending”. Which is a little more reassuring than the comments of its chairman (and former deputy mayor of London under Boris Johnson) Sir Edward Lister at a property fair earlier this year: “We’re interested in working with anybody who’s got money,” he confided, “and we don’t really care where it comes from.”

PS: The build-to-rent policy (under which these funds were lent) was launched in 2012 by Tory MP and former housing minister Mark Prisk, who left the government in October 2013. The following June he joined Essential Living as a “strategic adviser” on £1,500 for one day’s work each month – working out at a none-too-shabby £187 an hour. In November that year, Essential Living bid for, and won, a build-to-rent loan.

More top stories in the latest issue:

Project Shepherd, meant to improve Britain’s electronic warfare capability, is not only late and over-budget but has created a worrying defence gap.

Recent court evidence suggests Britain’s biggest bank HSBC and chief exec Stuart Gulliver weren’t so marginal to the Libor-fixing scandal after all.

New data shows how trade support body UK Export Finance, which has backed some very corrupt companies, remains intensely relaxed about having done so.

Good news for the historic lightship Planet – its controversial sale by the Canal and River Trust is postponed until March.

More on the serious misuse by Cleveland Police of anti-terrorist legislation to spy on three journalists, two whistleblowing police officers and a lawyer.

An unseemly row between two hospice charities emerges after the Charity Commission criticises one of them for its poor deal with a fundraising agency.

More on the underhand way the Church of England announced it was to close Manormead, its one and only nursing home for retired clergy.

To read all these stories in full, get the latest edition of Private Eye - you can subscribe here and have the magazine delivered to your home every fortnight.

Next issue on sale: 24th January 2017.
More From This Issue
In The Shop
Only In The Magazine
Private Eye Issue 1435

ONLY £1.80

24th January 2017
In This Issue private eye
Health Correspondents Can’t Cope with Influx of Ailing NHS Stories… Littlejohn, Morgan, Hopkins: Why Do Arses Keep Appearing in the Daily Mail?… Bank of England Economist Admits He May Be Wrong About Being Wrong… Hospital beds, Seats on Trains – What We’ll Share in the Shared Society… Three Bears in Pop-Up Brothel Shock – Nursery Times Exclusive… Much Longer Journeys Mean Passengers Getting ‘Better Value Than Ever’ Says Rail Chief

And also...

- Trump that: The president-elect’s diary, as told to Craig Brown
- Sun tribute: The death of George Michael – a very Bizarre tale.
- Health check 2017: M.D. takes the pulse of the NHS

For all these stories you can buy the magazine or subscribe here and get delivery direct to your home every fortnight.

Private Eye Issue 1434