London buyers shrug off hike in Stamp Duty, say agents

Wednesday 25th April 2012
Written by Rosalind Renshaw

Last month’s rise in Stamp Duty to 7% on £2m-plus properties has apparently had little effect on the prime central London market.

Cluttons said it has seen a number of deals exchange and complete since the new higher tax bracket was introduced and has continued to agree new offers on properties worth in excess of £2m.

The firm says there has been no evidence of price renegotiation or buyers requesting that sellers share the additional buying costs.

James Hyman, partner for residential sales at Cluttons, said: “Buyers have taken a very mature attitude towards the comparatively small additional cost when purchasing above the £2m mark, accepting it is part of the premium they need to pay in order to secure the property they want.

“They believe that the momentum of the market will deliver price gains over the coming years which are considerably greater than this increased upfront cost.

“The market is exceptionally buoyant – stronger than it was this time last year – and sentiment in prime central London is positive across the board, despite the best efforts of the Chancellor.”

Spicerhaart’s London brand, Felicity J Lord, said it had a record-breaking month in March with the number of properties being sold up nearly 44% on the previous month.
 
Since the start of 2012, Felicity J Lord says it has sold in excess of £100m worth of property across the capital.
 
At the same time, the number of properties coming on to the market increased by 35% while the number of homes being valued by Felicity J Lord staff rose by 56.5% over the same period.
 
Mariel Roe, divisional sales director for Felicity J Lord, said: “Last month proved to be an extremely strong one for Felicity J Lord.

“Whilst the end of Stamp Duty Relief was certainly a factor, the desire of Londoners to move continues to remain strong in spite of the challenging economic environment.”

Meanwhile, Winkworth says that the sales market in London is showing new signs of life, after sales instructions to its offices in the capital rose 20% in the first three months of this year compared with 2011.

New applicant numbers are up by 12% on this time last year, and completed deals have risen by 25%.

Winkworth says the improvement is in the middle market, but like other agents, says that the rental market in London looks to have peaked.

Chief executive Dominic Agace said: “The market for family houses in Greater London, long stymied by a shortage of available stock, is finally showing renewed signs of life. The typical buyer in this segment is a professional individual or couple with a minimum of 20% equity to invest in a new loan. Already a home owner, the need here is for more space for a growing family.

“It is, therefore, very encouraging to report that our offices have witnessed a 20% year-on-year increase in sales instructions over the first months of the year and a 12% rise in buyer registrations. Over the same period, completed transactions rose by almost a quarter.

“Despite ongoing uncertainty in the global economy, we are confident that transactions in the London family home market will increase by 5-10% this year against a background of stable prices.”

(8) Comments

Added by Dave on 2012-04-26 09:49:47

I really think London's had it's day as the leading bubble-city. There are plenty of cities with better quality of life, and they're not all in the Euro-zone either - think Zurich, Geneva, Toronto, Sidney.......Come to that, what's wrong with buying in Germany? Weak Euro, and if it all goes belly up you'll have an asset denominated in Deutschmarks!!

Post-Olympics there'll be a helluva hangover for a lot of get-rich-quick merchants!
Added by on 2012-04-26 09:48:02

I'm surprised we haven't had many of the usual Estate Agent mafia commenting on this article - could it be even they don't believe the bullshit???!

7% on the cost of a £2M property a 'comparatively small additional cost???'. I know these are rich people, but we're talking about upwards of £150K here, even on properties just above the threshold (and most Prime Central London stuff is well above that). Even the wealthy don't like throwing 6-figure sums down the toilet (they wouldn't have got rich if they did!!).

If you own in London.....sell up now, you might just get out before being flattened in the stampede!
Added by rantnrave on 2012-04-26 09:30:39

Prior to the budget, around a hundred properties valued over £2m were put on the market across the whole of England & Wales each month.

Using Property Bee and Rightmove, an HPCer last week reported as many as 50 £2m+ properties in London that were new to the market or fallen through sales each day.
Added by IamSpartacus on 2012-04-26 08:57:16

Don't worry Nick, London is part of the real world. As they're about to find out......

PS are people really stupid enough to still be buying in London after the government have basically decided to crash the market? If they are it just means the crash will be all the bigger - GO AHEAD SUCKERS, PILE IN!!!!
Added by Nick on 2012-04-25 23:20:56

Whoopee-do for London.
Meanwhile, in the real world..........
Added by X5 on 2012-04-25 11:41:01

I see the HPC doomsters have arrived early!

I can assure them there is no panic, and what we actually have is a largely normal market in London now that people realis the boom can't go on for ever. There always was going to be a modest price correction, and we have had a couple of deals fall through since the budget, but there categorically will not be crash. Deman is too far ahead of the limited stock of desirable properties.

Dream on, losers!
Added by Dave on 2012-04-25 11:33:43

Good to see there's lots of new property coming to the market now. So much for shortage of supply!
Added by Forever blowing bubbles..... on 2012-04-25 10:44:53

Estate agents desperately trying to talk up the market shock!

I'm sure they're right, London house prices will always go up, nothing can stop them, there is no limit. Supply can't keep up with demand.....rich Chinese buyers......worried Greek millionaires.......small crowded island (any more cliches I've missed? Please add.......)

As 7% has had no impact on demand perhaps they should increase it to 15% - more money to the Exchecquer with no discernible impact on the market - free money!

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