A former head of Savills’ buying arm says well-heeled overseas buyers are unphased by the recently-increased stamp duty on high value London homes - but the same tax rise has contributed to Britons being priced out of parts of the capital.
Natalie Hirst, who now runs her own property advice service, says 20 years ago some 70 per cent of her clients who bought prime central London property were British. Today, 70 per cent of them of them are foreign.
“Much has been made of the government’s decision to raise the top tier of stamp duty to 12 per cent on property worth over £1.5 million. And if it is a second home or a buy to let, there’s an extra three per cent on top. If you had bought a £4.5 million property in 2007, you would have paid about £160,000 in tax. If you bought it today, the figure will be over £500,000” she says.
She says this hike has deterred Britons. “In Chelsea, Knightsbridge and Belgravia, most of the Brits have stopped buying. Faced with increased stamp duty, higher taxes and government austerity, all but the boldest are hunkering down” Hirst claims.
But she says it’s not the same for the international elite.
“Chinese, Russians, Middle Eastern and even some European buyers are all continuing to come to London and seem completely unphased by the latest price hikes. When you talk to them, the reason is clear. They are simply more used to paying these types of taxes than the Brits. Seen from an international perspective, even 15 per cent is not a negative, it’s the norm” she insists.
She says this, on top of relatively low fees charged by British agents, means the world’s wealthiest regard some aspects of the London property market as “positively cheap.”