Moving to London

Learn more about England in International Living Postcards--your daily escape

Wednesday, December 31, 2003
London, England

With his retirement, my British husband decided we should look into living in his native city, London.

In general, when you come from bubble-inflated New York City, you are pleasantly surprised at what is on offer. Our smart two-bedroom apartment on the East Side of Manhattan could be converted into a quadruplex more than 50% larger in a gated community in London's Docklands with four bedrooms and drop-dead views over the Thames to Greeenwich Naval Observatory, one of the most spectacular bits of architecture in London.

Or if we wanted to be more traditional, we could buy a four-story house with a garden on a perfect Georgian square in Bow, also in the eastern part of London. The site is Tredegar Square, and consists of three reception rooms and four bedrooms.

Either one would have been tempting to us. But then the troubles began.

These could be summarized by a list: plumbing, mansion taxes, communications.

Let me start with the most embarrassing issue. Both of the properties we considered most appealing were on four floors. Yet in both cases, there were toilets or bathrooms only on two of the floors (a total of two baths). If we had guests for a party, they would have to climb upstairs from the reception floors, something that New Yorkers would consider an extreme imposition. And as we are getting older too, all those steps for vital needs would be a problem before long.

And in both of the homes we looked at, you would also have to go downstairs for the bathroom from the top floor bedroom (the one where we would have a study or a room for our guests). I have no idea what putting in toilets would entail, but clearly this is something you would have to budget for. Any work in a Georgian property or an apartment building would involve plenty of red tape.

Taxes are another matter. In New York, the state we are moving from, they have imposed a so-called "Mansion Tax" on any property sold for over $1 million. In addition, our co-op requires payment of a 2% "flip tax" when apartments are sold. As a result, an awful lot of co-op apartments--like ours--are priced right under the proverbial 7-figure level, to avoid the state tax.

In England, it is not so easy. The Government is treating home buyers as "a cash cow". Under the 2003 budget, a half-million more purchasers are being hit with the British version of the Mansion Tax. This is "stamp duty" which kicks in at a much lower price level than the equivalent of $1 million. The British tax begins to bite at a mere £60,000 ($105,000), enough in London to buy you a broom closet. The tax used to be 1% across-the-board after that, collected by the solicitors who do the property transfers in England.

Of course the low tax rate was too tempting to resist by a revenue-hungry Labour Government. Under the latest budget, the tax is left at 1% on properties priced up to £250,000 ($444,000). After that the tax rises to 3% for purchases up to £500,000 ($889,000). By the time you are buying something comparable to our New York apartment, the tax is 4%.

And the tax applies to the whole purchase price of the house or apartment, not the bit over the lowest ceiling.

A third area of concern--for wired-up people like us journalists--is the cost of staying in touch. Our current London base (taxed at 1% when we bought it, but taxable at 2% were we to sell it today) is in an area which does not yet have high-speed Internet access via cable. It also is too far from the ASDL site it would be fed from at British Telecom. Moreover, the Internet café we used to be able to walk to has gone out of business.

British Telecom would be happy to let us use a telephone line to log slowly and expensively on to the web. The cost for this is nearly the equivalent of $100/month, and we would also have to pay telephone timing charges. In New York we pay $40 to the cable TV company for always-on Internet for as much as we use per month. Moreover, when on the net in London, we could not send or receive phone calls unless we continued our existing pay-as-you-go cellular phone service too.

Although it is still not up and running, there is a solution to this problem. In 2004, the British supermarket chain Tesco will begin offering cheap web connections which do not require a BT line. The system will use the same technology as cellular phones. Until then, I am taking the Underground to Oxford Street to use the Easy Internet café there.

Vivian Lewis
For International Living

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