Given the high levels of political uncertainty and rising taxes on high-value property transactions and second homes, it’s no wonder residential property transactions have taken a tumble compared to 2015.
Over the past two years, UK property markets have faced threats of a ‘mansion tax’, a Scottish referendum on leaving the UK (ultimately voted down), increases in Stamp Duty Land Tax (Land and Building Transaction Tax in Scotland) on higher value transactions and an additional 3% tax was imposed on second homes. And all that was just the precursor to June’s surprise UK vote to leave the European Union (‘Brexit’).
Fall in transactions across the UK
Source: HM Revenues & Customs
Fall in transactions across London
While prices have been softening in some parts of the market, transaction volumes have borne the brunt of these headwinds. HM Revenues & Customs recently reported an 8.3% fall in residential transactions across the UK compared to the same period in 2015 and LonRes recently reported that transactions in London were down a staggering 42% from a year earlier.
Average prices in London have changed very little over the past 12 months, according to LonRes. The London property data and analysis firm reported that in prime central London average prices for the second quarter of 2016 were 0.5% lower than the year before, while prime properties were up 1.8% in greater London and 0.6% in London’s ‘fringe’.
Buyers in London are paying an average of 10% less for homes priced at £2 million or more compared to 2014
Buyers in London are paying an average of 6% less for homes priced under £2 million compared to 2014
|LonRes Location Description|
|Prime central london||SW1X, SW1W, SW1A, SW3, SW7, SW10, W1K, W1J, W8|
|Prime london||NW1, NW3, NW8, SW1P, SW1V, W1T, W1H, W1U, W1G, W1W, W2, W11, W14|
|Prime fringe||SE1, SE11, SW4, SW5, SW6, SW11, W4, W6, W9, W10|
If you require further information regarding the residential real estate service we offer, please contact Katherine O'Shea.
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