Bankers not splashing bonuses on property
Friday, 29 July 2011 12:51 PM
Despite receiving an estimated £14 billion in bonuses last year, few bankers are choosing to spend their cash on property, according to a leading property search firm.
Sourcing Property, which acts for a number of banking clients, said investment in property was not booming because a smaller proportion of banker bonuses are now being paid in cash.
Jo Eccles, director of Sourcing Property, said: “Typically, approximately one third of the bonus amount is cash, and that’s after tax. For example, from a £1 million bonus, £500,000 will be taken in tax, and usually, two thirds will be paid in shares, so the actual cash sum will be approximately £166,000.
“The two thirds paid in shares can generally only be cashed in over a three-year period and some banks are increasing this to five years, meaning that people don’t tend to receive huge one-off lump sums anymore. With European and UK bank shares depressed, the banker clients we’re representing aren’t cashing in their vested shares to buy property, as they don’t want to realise those losses.”
Eccles said a client who works for Credit Suisse is sitting on a lot of stock but has opted to buy a modest property, as his firm's shares are down 17 per cent this year.
“He’d rather hold on to them in the hope of them rising, rather than cashing in at the current low level. This decision is quite common with other banking clients of ours,” she added.
Want to be the first to know when we break a story? Follow @AboutProperty on Twitter and subscribe to our free weekly newsletter.
-
Tags:
- bankers ,
- investment ,
- uk property news
