German fund manager SEB has pulled out of buying ING Real Estate’s 88 Wood Street development. It had agreed to buy the scheme last month for around £180 million but has been unable to secure the necessary funding in the current poor economic climate.

It is the second time a sale has fallen through on the building. Atlantic Property Partners had offered £190 million but that deal also fell through.The 17 floor iconic building, designed by leading architect Lord Rogers, was bought by ING for over £230 million in 2006.

Do cheer up. There is no such thing as all bad news. Every cloud has a silver lining. Most Britons are still in work and a third of them are on secure state incomes. In the words of Rudy Giuliani, the New York mayor, after 9/11, take the kids to the park, buy a pizza, see a show.

Nor is that all. Some good things are happening. The price of oil has tumbled 40% since July. House prices are down 13% from last year. Whatever the papers imply, this is good news far more than it is bad. Those with strong nerves and some money can even buy shares that are unbelievably cheap.

Restaurants are emptying, air travel is easing and I noticed last week that central London traffic jams were strangely diminished. Soon hotels will be discounting heavily and plumbers will not cost an arm and a leg.

that the best things in life are free.

The collapse of the buy-to-let market should lead to rents plummeting and people spending realistically on housing. The end of the home-ownership boom should encourage existing owners to sublet and reduce the underoccupancy that has long inflated British house prices. This is a good thing for all.

The impact of recession on government should be even more benign. Only now do we see how casually the rampant growth in revenue has led ministers to behave. There should be no more extravagant pay settlements for doctors; no more thoughtless purchase of NHS and ID-card computers; no more of the £70 billion that Labour has spent on “advice” . The death of spurious consultancy and the reassertion of civil service morale should be another gain of the recession.

TAX

A businessman whose family owns more than half a dozen houses, including a £50m mansion on Britain’s “Billionaires’ Row”, has disclosed how to avoid paying tax on multi-million-pound property deals.

Hossein Ghandehari bought Toprak Mansion on The Bishops Avenue in north London with his 75-year-old mother Hourieh Peramam and his wife Yassmin this year.

Ghandehari, a 43-year-old Iranian-born businessman whose family is said to be worth £1 billion, mainly from property, said transactions involving vast sums were being kept hidden from official records using legal methods.

“There are many, many ways in which what is registered on the Land Registry is different from what you end up paying,” he said.

The price declared to the tax office, and then recorded by the Land Registry, is used to calculate stamp duty. The top rate is 4%, implying a saving of £40,000 for every £1m lopped off the declared price.

Ghandehari said one method was a process known to property dealers as “flipping”, in which a buyer sells on a house before he is due to complete his own deal. He said: “One of the ways these things happen, and I’m not saying this is the case of what happened here [with Toprak], is you buy a property for £4m and [if] I am an offshore company, I buy it for £4m with a six-month completion, and then some other company comes along and I flip it for £6m.

“What the [tax office] ends up receiving is . . . the tax on £4m. But that ‘upside’ is just not there, the £2m. And that could go on indefinitely, it could go up to £20m, £50m if the market justifies it.”

Ghandehari insisted such dealings were “all legal”. He said: “The fact is you sell the company which owns the property, or you flip it and they all complete at a certain date.

“You just buy the company which owns it . . . everything takes place offshore, nothing takes place here, no tax, no nothing, so the property becomes the asset of that offshore company.”

Ghandehari, his wife and his mother are all tax registered outside the UK. He and his wife live at Toprak Mansion when they are in Britain, while other members of his family live permanently here, some of them in The Bishops Avenue.

Land Registry records state that the mansion, a neo-classical 30,000 sq ft building, was bought for just under £41m in January by an offshore company controlled by Peramam.

Ghandehari said his family actually paid nearly £9m more for the house, which was named after Halis Toprak, the Turkish businessman who built it, but has now been renamed Royal Mansion.

Other rich homeowners in the street include the steel magnate Lakshmi Mittal and members of the Saudi royal family.

Ghandehari, who said he first bought a house in the Hampstead street six years ago because he felt it was an “excellent place to live”, said his family intended to buy more houses there. “Once my mum said we should buy the entire Bishops Avenue, should it become available. If we have the money and they are good properties, yes we are buying.”

However, he said the poor state of the market meant purchases would be put on hold.

Ghandehari said he had recently been offered £80m by a Russian oligarch for Royal Mansion but refused to sell because he loved the house. “He managed to see it for about 10 minutes and [the agent] said, ‘What price would tempt you?’ and I said £100m, but I didn’t mean it, and he came back and said, ‘£80m and he wants to buy it there and then’, and I said no.”

There was gossip when the purchase of Toprak was announced in January, with some questioning how Peramam, who fled her native Kazakhstan at the age of 17, accumulated such wealth.

A Kazakh exile said the country’s president, Nursultan Nazarbayev, was indirectly involved in the purchase of Toprak Mansion. Ghandehari denied this, although he said he knew Nazarbayev’s family.

The Ghandeharis’ spending began in July 2002 when, according to the Land Registry, Ghandehari paid £4.2m for No 33.

In 2006 the family bought two neighbouring plots that became Wyldewood, where they lived until last year. The offshore firm that now owns Wyldewood is run by Yassmin Ghandehari.

Last November, £4.9m was paid for No 24, by another offshore trust also run by Yassmin. At the same time a plot of land behind No 31 was bought for about £900,000.

In January, a third offshore firm bought Toprak. Mortgage documents show the company is run by Peramam. Ghandehari said his family also owned a few more houses in the road.

Tax rates

Buying property costing more than £500,000 incurs a stamp duty of 4%, but if the property is owned by a company, anyone buying the firm pays duty on only 0.5% of the purchase price and then owns the property. Offshore companies are exempt from stamp duty entirely