Why Prime London activity should surge

It seems likely that Prime London activity will be particularly strong in the next few months, owing to a number of factors.

The stamp duty holiday has already had a big impact on sales of higher value properties. This makes sense, given that it has made the biggest difference to non-first-time buyers purchasing homes at around the £500,000 mark.

What’s likely to have a bigger impact on the truly Prime areas of London however is the looming deadline of the overseas stamp duty surcharge of 2% at the start of April 2021.

As many familiar with the London market know, there’s lots of foreign interest in the capital. London is seen as a reliable place for wealthy people to park their cash across the globe.

For those looking to sink a lot of money into the capital, avoiding paying this 2% tax on a multimillion pound purchase is a big deal.

There’s also two other contributing factors, which could spur on people from overseas to buy in London.

Ever since the Brexit vote exchange rates have become more favourable for those who hold cash in a foreign currency.

Meanwhile house prices at the top end of the market have fallen by 17% from mid-2015, according to Knight Frank.

You might think that travel restrictions could stop people from overseas being able to buy in London, but that’s unlikely to be the case.

Indeed, recent data from London Central Portfolio shows that 22% of acquisitions are being bought by overseas investors who haven’t even visited in person. While this isn't ideal for some, it's not that uncommon for the wealthiest buyers.

It’s likely to be a busy few months in the most luxury areas of London, and the only worry is that the market severely contracts once the overseas stamp duty surcharge comes into force.

Ryan Bembridge

Editor

PropertyWire

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