From Property Bonanza To An Almost Complete Standstill
A report from the Evening Standard in the UK. “Sales of luxury apartments in London have collapsed by more than 80 per cent since the spring in a ’staggering’ market slump, the Evening Standard can reveal. A toxic combination of rocketing stamp duty rates and ‘Brexit blight’ have brought the capital’s prime property bonanza to an ‘almost complete standstill’ and could threaten Mayor Sadiq Khan’s ambitious house-building targets. Just nine newly-built homes worth more than £5 million changed hands in the six months to October, down 83 per cent from the 52 that were sold in the same period last year, according to an exclusive analysis of the latest Land Registry data.”
“The figures have triggered near panic among developers and agents specialising in the so-called ’super prime’ market with one claiming that the Government had scored ‘a spectacular own goal’ by raising stamp duty rates to 12 per cent for homes worth more than £1.5 million. The figures are even bleaker than those seen in the property ‘nuclear winter’ that followed the 2008 credit crunch and banking crisis when sales fell by around 45 per cent.”
“One prominent agent, Trevor Abrahmsohn of Glentree Estate, said prices for some homes in the higher levels of the market may now be 30 to 35 per cent below peak levels of 2014. Latest research from high-end agency Knight Frank suggested that Chelsea prices fell 12.6 per cent in the year to November and properties close to Hyde Park saw an 11.2 per cent drop.”
From B Daily. “A combination of Brexit and tax increases is putting a serious squeeze on London’s luxury upmarket housing market and the UK’s wider luxury market as a whole. Naomi Heaton, Chief Executive Officer of LCP believes a cocktail of Brexit-induced economic uncertainty, combined with the added pressures of tax increases, including the added 3% Additional Rate Stamp Duty (ARSD), is putting serious pressure on the top end of the housing market. She said: ‘As can be seen over the last 6 months, the market appears to have finally succumbed to the constant residential tax hits from the Government.’”
From This Is Money. “A shortage of properties coming up for sale means Britain’s housing market will get off to a slow start next year, the Royal Institution of Chartered Surveyors predicts. Meanwhile, more than a third of surveyors told Rics they thought properties in the area they covered were overpriced. Donald Leslie MRICS of chartered surveyors Donald Leslie & Co in Amersham, said: ‘It has changed to a buyers’ market and there is evidence of discounting. Overpriced properties are not attracting interest.’”
“Mark Annett FRICS of estate agents Mark Annett & Company in Chipping Campden, adds: ‘It has been very busy although achieving a deal is tough. Vendors seem to think prices have risen over and beyond reality.’ John Frost MRICS of estate agents The Frost Partnership in Beaconsfield, said: ‘Stamp duty has affected the number of high value market transactions as purchasers are not willing to pay the increased tax.’”
From Letting Agent Today. “The dramatic slump in the prime central London sales market is now leading to a reduction in rents being achieved in the lettings sector too. Yesterday we reported on Estate Agent Today that one agency claimed transactions were 60 per cent down from a year ago in some parts of prime central London - now another agency, Knight Frank, says the increase in supply of homes to let is pushing down rents.”
“‘Higher stock levels have put downwards pressure on rental values which has boosted affordability for tenants, whose negotiation position has strengthened over the course of this year. Higher supply is the result of increased uncertainty in the sales market, which has meant a growing number of vendors opting to let rather than sell until more clarity emerges surrounding future pricing trends’ admits Tom Bill, head of London residential research at Knight Frank.”
