Economy & Politics News
This year the residential property market in prime central London has so far been a game of two halves. At Manors, Marylebone’s longest established estate agency, the year started briskly with a notable increase in activity as buyers raced to snap up properties for sale in W1, W2 and surrounding areas before the Stamp Duty Land Tax increases came into effect in April. However, as expected, by March demand had slowed down and market activity and sales volumes have tailed off since then.
With June’s EU referendum on the horizon causing political uncertainty, coupled with the significant tax changes and higher transaction costs, buyers are currently more cautious. Added to this, global economic weakness stemming from slower-than-expected growth in emerging markets, especially in China, and low oil prices are currently having a negative impact on demand for property among overseas investors. What’s more, until recently offshore companies were exempt from paying 40% inheritance tax, but changes to remove this loophole are expected to come into force in 2017 which will be a further cause for concern for many overseas purchasers.
According to Dominique Zarbhanelian, Residential Sales Manager at Manors, “Buyers have definitely become more price sensitive recently. Properties are tending to stay on the market for longer periods, sales volumes are down and we’re even seeing price reductions in some cases.
“We’re finding that active buyers are tending to target quality apartments in the best locations as these are perceived to be safe investments which are always in demand and easy to sell on. However property owners need not panic; the population explosion in London in the last decade, along with significant political turbulence in other world markets, ensures the enduring appeal of London property. Whilst the current situation presents a unique window of opportunity for property speculators who may be able to negotiate favourable deals until political certainty returns in the UK and the market picks up again, the medium and long-term outlook for property in prime central London remains extremely buoyant.”