London Investment Trends For 2015


According to independent property buying agency, Black Brick, despite stamp duty reform and the looming election, demand for prime central London property remains high, and domestic and international interest, particularly Chinese, is strong. Black Brick has signed new clients from Hong Kong, Saudi Arabia, Russia, Cyprus and the UK so far in 2015, with budgets varying from below £1m to above £10m. A rise in the US dollar against the pound has boosted international demand, while record low mortgage rates are encouraging domestic demand.

Camilla Dell, Managing Partner of Black Brick, comments: “At first glance, the global backdrop hardly seems positive for the PCL market. Renewed concerns about the Eurozone, heightened geopolitical risks, and plunging oil prices, add in the changes to stamp duty land tax (SDLT) announced in the Chancellor's Autumn Statement in early December, and it is not hard to see why vendors are now having to be more realistic. It is no co-incidence that the falls reported at the top end of the capital's property market, equate roughly to the additional 5% in SDLT that buyers must now pay. Importantly, while price adjustments have been the order of the day for deals already in progress, there has been scant evidence of deals falling through due to the SDLT changes. Though very early days, we believe this bodes well for the market's ability to absorb the higher tax rates and adjust accordingly.

“We have seen continued interest in prime central London property from our client base across the world; stamp duty reform and the impending election have not deterred them. Shorter-term supports include the sterling's recent weakness, particularly against the US dollar. The 14% decline in the value of the pound against the US dollar since the summer is a significant boost to many overseas buyers with dollar assets. Meanwhile, the changes to SDLT are providing a welcome fillip to potential property buyers at lower price bands.

“Chinese interest in London property continues to grow apace. According to figures recently released by the government, the number of so-called 'investor' visas granted to Chinese nationals, ploughing at least £1m in the UK, doubled in the year to end-September. Chinese nationals accounted for 43% of all investor visas, the highest proportion of any country. It's no surprise that we have seen continued growth in interest from this market, a trend reflected in our recent hiring, Grace Ding, a fluent Mandarin speaker who will focus on assisting Black Brick's fast-growing Chinese client base and on developing our business network across Asia.

“As far as other trends for 2015 go, we believe that homeowners with existing large basement extensions will now be able to command a significant premium over neighbouring properties given the restrictions announced on future development by the London Borough of Kensington & Chelsea. The new rules, already signed off by the government and expected to be approved by the Council in early 2015, include a reduction in how far basements can extend under the garden, a restriction to a single storey extension in most cases, and an outright ban on basement developments under listed buildings. Kensington & Chelsea is the first Borough to limit so-called 'iceberg' developments, but others are expected to follow suit in central London, and this will make those homes that already have vast subterranean basement extensions extremely rare!”

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