Prime property market in London unaffected
04-05-2012
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Both prices and applicant numbers rose in Prime Central London during April, despite the Budget announcement in March to increase stamp duty to 7% for individuals and 15% for those purchasing as non-natural persons.
Early indications of the impact of recent changes to stamp duty are that the market is so far proving resilient, said Liam Bailey, head of residential research.
He pointed out that as was the case following last year's stamp duty rise, there was a spike in the number of £2 million plus properties sold in March and the number of sales for this April is higher than that for April last year. ‘It is important to note however that activity was relatively weak last April,’ he added.
‘Applicant volumes are not only stronger in April than in the same month last year but, reassuringly, they were also up 13% on last month, signalling that prospective buyers have not been deterred by the stamp duty changes. Though the number of viewings was down 7% in April compared to March this year, the figure was up on April 2011,’ said Bailey.
Meanwhile, there has been much talk about wealthy French buyers turning to London, spooked by French election candidate Francois Hollande's talk of wealth taxes but Knight Frank has not seen much hard evidence of this yet.
‘Knight Frank saw just one additional sale to a French national in the first four months of this year compared with the same period in 2011. But there is anecdotal evidence of increasing interest, both in terms of the number of walk-ins reported by our offices and of prospective buyers searching online,’ explained Bailey.
‘By looking at search activity on Knight Frank's Global Property Search website, we see that the number of French web users viewing prime central London properties on the site began to increase as the eurozone crisis hit in May 2011,’ he said.
‘Although this activity began to tail off later in the year, there was a significant spike in February with a 68% year on year growth in property searches which coincided with Hollande's proposal for a 75% tax on top earners,’ he pointed out.
‘Interestingly, the year on year change in visits for the three months to April shows that, while French searches in the sub £1 million sector have dropped off over the past year, down 14%, interest in the £5 million plus bracket has surged and is up 30%,’ he added.
