Salient to Investors:
Even the wealthiest property investors are fleeing London’s best districts due to higher sales taxes of up to 12% on the amount above £1.5 million.
Camilla Dell at Black Brick Property Solutions said clients are spending an average of £2 million less on each transaction this year and are buying in less expensive neighborhoods because taxes are less when splitting the money between several properties in the sub-1 million-pound market. Dell said prices below the tax threshold of £937,000 pounds are climbing and owner-occupiers are being penalized.
Lonres said sales of London homes for £2 million or more fell by a third in Q2 from a year earlier and a buyers’ market has returned, with no improvement in market conditions seen before September.
Johnny Morris at Hamptons Intl said £500,000 apartments in London typically yield 4% to 5% versus 2% for a luxury home in London’s best districts.
137 homes in Kensington & Chelsea were sold in April, the lowest monthly total since March 2009.
Knight Frank said 2015 prices through July dropped 2.3% in Chelsea, 2.1% in Knightsbridge and 0.6% in Notting Hill.
Giles Hannah at Christies Intl Real Estate said the decline in prime central London is temporary and prices will eventually continue to rise – the market has historically recovered from shocks before.
Savills said their average sale of a London home fell by £200,000 to £3 million in half1, 2015 vs. half1, 2014, and the number of transactions fell by 15%.
Read the full article at http://www.bloomberg.com/news/articles/2015-08-07/taxed-out-of-mansions-london-investors-head-down-market
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