05 Oct Super wealthy turn to the Home Counties
Here Philip Selway, Managing Partner and Head of London at The Buying Solution shares his thoughts on the Q3 Prime Central London and Country housing market: “In both the London and country markets, there has been a noticeable falling away of interest in property above £2m which is almost certainly due to the stamp duty increases announced in the March 2012 Budget. We believe that a number of buyers are “sitting on their hands” awaiting the outcome of the proposed annual CGT charges on properties priced above £2m owned by ‘non-natural persons’.
“This does not appear, however, to deter wealthy overseas buyers, who continue to drive the Prime Central London market with investment as well as lifestyle purchases. Interestingly, the Home Counties has also seen a substantial increase in transactions at the top of the market, with 12 purchases above £15m so far this year, compared to just one recorded in 2010. The continued global financial uncertainty, particularly in a number of European countries, means that the UK is even more attractive to the overseas buyer – not only because of history and culture, but also because of political stability and a secure legal system.
“In the long term, I don’t expect that increased property taxes will deter buyers; they might lower values around the £2m price range perhaps, but people do tend to carry on as normal once they have assimilated tax changes into their financial structures.”
Home Counties (Berkshire, Buckinghamshire, Surrey, South Oxfordshire, West Sussex)
Nick Mead, Associate in the Home Counties, comments: “In the last quarter, the majority of the market activity has been focused on property priced up to £1.5m, mostly from needs-driven UK buyers who are moving out of London for schooling and more space. Meanwhile, the £2m-£3m market has been significantly affected by the increase in stamp duty, and the proposed ‘mansion tax’ has further dampened this market. We’re seeing a continued flurry of price reductions which, if anything, has grown in recent weeks.
“Ultimately, those who are likely to bear the brunt of a mansion tax are likely to be those who are already suffering the effects of middle-class poverty – the asset rich and the cash poor. The sooner plans for the mansion tax and proposed higher rate council tax bands are finalised, the better, as the uncertainty and speculation is weighing heavily on the market. On a short to medium term basis, it is likely to actually lead to a reduction in the revenue that the exchequer might receive due to a fall in transactions.”
Mark Lawson, Partner and Head of the Home Counties team, adds: “Contrary to the above, the top-end market in the Home Counties has been incredibly active. To our knowledge, in 2010, there was just one transaction at £15m+ – last year there were eight in total, and this year, there have already been 12 deals at £15m and above. This increase in transactions has been fuelled by international buyers who are seeing better value outside of Prime London with prices approximately £1,000 per sq ft for a top-quality property in the Home Counties, compared to more than £6,000 per sq ft in Prime Central London.”
Source : propertytalkLive
Friday, 05 October 2012 10:00 Alex Bell News – Housing Market