How the UK Residency by Investment Programme Leaves the Provinces Underfunded
Compared to 2018, the number of applicants who were granted the UK investment residency in 2019 rose by almost 100%. This translates into almost $1 billion in direct investment from overseas. 360 foreign nationals invested £2 million ($2.6 million) to obtain the Tier 1 Investor Visa last year. The growth in terms of applicants and rates enabled the highest investment yield in the history of the programme: £720 million ($941 million) was raised in 2019.
Most applicants channelled their £2 million into safe investments such as corporate or investment-grade bonds. Yet last year the Home Office removed government bonds from the qualifying list aiming to attract funding in other economy sectors.
Investing in blue chip companies is of no use to the UK’s poorest areas. Many believe that the programme would make more sense if the government encouraged investment to the north or Cornwall or any other regions in need of funding.
In the US, for instance, E.B. 5 visa applicants must create a minimum of 10 local jobs. If each UK Tier 1 applicant was required to do so, the UK would have provided 3,600 new jobs last year.
Not surprisingly, London accommodates most of the investor capital in the UK. Candidates purchase deluxe properties in London and invest into London-based companies. Meanwhile, the gap between London and the north is growing bigger. The Health Foundation reports that there is a dire necessity of extra funding in the northern regions.
With the prices already at their highest in London, critics believe investors should be taking their funds elsewhere in the UK.
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