There is a real shift in the central London property market both in terms of buyer nationalities and their reasons for buying a property, new research has found.
There has been a significant increase in the number of buyers from the UK, up to two thirds in the first half of 2018 compared with less than 50% in previous years, according to buying agency Black Brick.
The agency has also seen a big change in terms of those selling properties with 66.6% of vendors from Russia and the remaining from the UK.
Other buyers include 16.6% from West Africa and the same percentage from Saudi Arabia, suggesting that they continue to see London as a good property investment.
‘We believe that the rise in UK buyers is due to the British being knowledgeable about what’s happening in the UK economy and politically, and able to take a view,’ said Camilla Dell, managing partner at Black Brick.
‘Whilst Brexit and potential political uncertainty are certainly a factor for UK buyers, they are more comfortable about proceeding, particularly when there is a real need to move and get on,’ she added.
The Black Brick research also reveals that a considerable number of its transactions are off-market at 33.3% and all of transactions undertaken this year have been for primary homes. In 2017, half of its transactions were for this purpose and in 2016 just a quarter were purchased as a primary home.
According to Dell this complete shift in people buying second homes is a direct result of increased stamp duty and the extra 3% on additional properties. ‘The consistent rise in the number of our clients purchasing primary homes in central London indicates that clients are no longer buying for investment, or for discretionary second home reasons, they are buying to live here and choosing London as their home so they are close to work and London’s excellent schooling options,’ she explained.
The figures from Black Brick is backed up by new data from HMRC, which shows that the tax taken from stamp duty receipts has declined. The Government is collecting less stamp duty overall than before changes were introduced by previous Chancellor George Osborne, with a total of £1.987 billion raised in the second quarter of this year from receipts in England and Wales.
The tax raised £1.999 billion in the third quarter of 2015, before Osborne introduced the additional 3% per cent surcharge for second home buyers and landlords.
Receipts were even lower in the first quarter of this year, at £1.883 billion. Receipts peaked at £2.61 billion in the third quarter of last year.
‘This is the first time there has been real evidence that supports the notion that higher tax rates do not lead to increase tax take. Whilst stamp duty remains a political hot potato, we can only hope that current Chancellor Philip Hammond takes note of these figures and looks to reduce stamp duty rates at some point in the future,’ Dell pointed out.
‘Looking to the second half of 2018, we expect the number of UK buyers to continue to rise. Those who don’t need to move choosing to wait until after Brexit and this is particularly true for international buyers,’ she added.
The company says it is saving its clients an average of 6.61% of the asking price, revealing the value its clients achieve both in terms of expertise and money saved by using the independent advisor.
There has been a significant increase in the number of buyers from the UK, up to two thirds in the first half of 2018 compared with less than 50% in previous years, according to buying agency Black Brick.
The agency has also seen a big change in terms of those selling properties with 66.6% of vendors from Russia and the remaining from the UK.
Other buyers include 16.6% from West Africa and the same percentage from Saudi Arabia, suggesting that they continue to see London as a good property investment.
‘We believe that the rise in UK buyers is due to the British being knowledgeable about what’s happening in the UK economy and politically, and able to take a view,’ said Camilla Dell, managing partner at Black Brick.
‘Whilst Brexit and potential political uncertainty are certainly a factor for UK buyers, they are more comfortable about proceeding, particularly when there is a real need to move and get on,’ she added.
The Black Brick research also reveals that a considerable number of its transactions are off-market at 33.3% and all of transactions undertaken this year have been for primary homes. In 2017, half of its transactions were for this purpose and in 2016 just a quarter were purchased as a primary home.
According to Dell this complete shift in people buying second homes is a direct result of increased stamp duty and the extra 3% on additional properties. ‘The consistent rise in the number of our clients purchasing primary homes in central London indicates that clients are no longer buying for investment, or for discretionary second home reasons, they are buying to live here and choosing London as their home so they are close to work and London’s excellent schooling options,’ she explained.
The figures from Black Brick is backed up by new data from HMRC, which shows that the tax taken from stamp duty receipts has declined. The Government is collecting less stamp duty overall than before changes were introduced by previous Chancellor George Osborne, with a total of £1.987 billion raised in the second quarter of this year from receipts in England and Wales.
The tax raised £1.999 billion in the third quarter of 2015, before Osborne introduced the additional 3% per cent surcharge for second home buyers and landlords.
Receipts were even lower in the first quarter of this year, at £1.883 billion. Receipts peaked at £2.61 billion in the third quarter of last year.
‘This is the first time there has been real evidence that supports the notion that higher tax rates do not lead to increase tax take. Whilst stamp duty remains a political hot potato, we can only hope that current Chancellor Philip Hammond takes note of these figures and looks to reduce stamp duty rates at some point in the future,’ Dell pointed out.
‘Looking to the second half of 2018, we expect the number of UK buyers to continue to rise. Those who don’t need to move choosing to wait until after Brexit and this is particularly true for international buyers,’ she added.
The company says it is saving its clients an average of 6.61% of the asking price, revealing the value its clients achieve both in terms of expertise and money saved by using the independent advisor.
