A good time to invest in London property?
London Market on down turn?
BREXIT, over supply, 3% extra stamp duty, less tax relief for landlords, a downturn in the world economy, fluctuating currency rates, disappearing international investors, these are just some of the storm clouds gathering over the London property market just now.
For the first time in ages agents are struggling to sell premium properties and developers can’t attract “off plan” buyers in anything like the same numbers as a year ago.
Analysts at Morgan Stanley predict a fall of up to one fifth in prices of new build flats this year; Berkeley Group who build luxury properties report a 4% downturn in reservations between November and February and Capital & Counties Properties another premier developer failed to sell anything at all in November and December.
The end of the gold rush started in October 2014 when Chancellor George Osborne announced steep increases in the stamp duty paid on expensive homes levying 10% in the band above £925,000 and 12% above £1.5m. From next month buy to let investors and companies will be charged an extra 3% across the board. (The shock decision to extend the additional tax to companies announced in last week’s budget could also stall the evolution of the fledgling professional rental industry which had previously looked all set to transform the property market).
With more than 54,000 homes costing a million or more planned for London over the next few years there are fears that the major developments at Battersea (3,500) Earls Court (7,500) and Nine Elms (18,000) will be undersold unless prices come down markedly.
With an acute correction in prices being widely predicted many developers are currently actively seeking revised planning permission to cut flats in size and make them more affordable. This is good news for those seeking to invest in the “middle market” which has historically been under supplied. As developers shift their attention down from the top end and supply increases so bargains may become more available.
With the market currently in a state of limbo as many international investors hold off buying in London pending the outcome of the BREXIT referendum in June developers maybe keener to attract UK buyers with tempting offers.
Now might therefore be a good time to look to take advantage of any attractive offers on the table.
If you are thinking of investing in buy to let properties contact us for a free consultation. For more information visit source.investment or call 0845 3881 369