I can’t help but feel rather admiring of John and Anne Darwin. Not because of the way they appear to have faked his death in a canoeing accident and relocated to Panama with the insurance money, but for the way they have exited the UK property market.
The couple owned two houses in Seaton Carew near Hartlepool, both of which Anne hung on to after John’s no longer very mysterious disappearance in 2000. She then sold one in March for £160,000. That was prudent, given that with rates rising the property market looked pretty fragile. But a few months later, hanging on to the one next door looked pretty shrewd too: she got over £100,000 more for that one when she sold it in November than she did for the first one.
If she gets the UK papers in her new apartment in Panama City she will be feeling pretty smug. Last week, we saw statistics showing that – despite the insistence from the bulls that they never would – London house prices fell 0.6% in October, while the latest Halifax survey says that overall prices fell 1.1% in November.
That makes it the first time since 1995 that prices have fallen for three months in a row. Worse, as The Evening Standard points out, “if this trend continues prices will fall by more than 12% in the coming year.” Personally I’d say 12% is optimistic. It’s pretty clear that house prices in many places are 30%-40% overvalued. It is also clear that the tight supply/demand situation that the bulls insist will keep house prices high forever does not actually exist.
Anyone still in any doubt on this one should see: Think twice before tackling a derelict property, where Ruth Jackson points to the huge number of empty houses all around us: the Empty Homes Agency estimates that there are 840,000 in the UK and, says the Times, another 420,000 homes could be created in disused commercial properties in Britain.
And as for demand, now sentiment has turned and lending standards have been tightened up (the days of self-certification mortgages – known as liar loans in the US – appear to be over) mortgage approvals are down sharply and estate agents have been reduced to hawking around town for buyers (I keep getting calls from people I left my details with over a year ago). The house price bubble is over.
So well done Anne Darwin. The down side for her, of course, is that her clever dealings won’t do her husband much good – he’s just been arrested after turning up in the UK claiming to have lost his memory, even as detectives discovered pictures of the couple together in Panama last year. But I imagine that her total takings of £455,000 (not including any life insurance she may have received) will go some way towards easing the pain of living alone.
Also nice will be the fact that she will be able to live pretty much tax free in her new home: according to Mike Warbuton of Grant Thornton, you only pay tax there on income actually earned in the country, making it “a tax haven in the sense that offshore assets are not taken into account by the local taxman” and a very “appealing home for the wealthy”.