London buyers shrug off hike in Stamp Duty, say agents
Wednesday 25th April 2012
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.”
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