Even after the overwhelming increase of taxes for stamp duty in the year 2014, London’s Prime Central real-estate sector for high-end homes has been performing exceptionally. Up until the month of July, homes that were valued above the US $12.48 Million/ £10 million experienced a decline of 3 percent as opposed to the prices previous year. This decrease in real-estate property price was the smallest when compared to the data accumulated over the year by property consultants and estate agencies.
What happened to the lower valued properties?
As compared to the properties valued above £10 million, the properties with a lower value (£5 million and £10 million) experienced a price drop of 4 percent. On the other hand, the properties valued from £2 million to £5 million experienced a decline of 4.8 percent in the market price.
But the most significant price decline was seen for properties that were valued less than £1 million. These properties experienced a whopping 6.1 percent decline in their prices which is the highest for the year.
What’s working for high-valued properties?
- For the high-value properties, the drop in prices has adjusted rather quickly. This is because high-end properties tend to experience lower sales volume giving them the exact space needed to adjust with the dropping trend.
- When talking about London’s Prime Central real estate sector, property sales increased during the 2nd quarter of the year as compared to the same quarter last year.
- The sales and adjustment of property values saw better days for high-end properties after the deadline for Brexit was postponed from March to October. This also helped boost the overall strength of high-end properties in the market.
- The properties priced highest in the city saw maximum transactions in the 2nd quarter as compared to the past 4 years in the real estate sector.
- Higher rates for stamp duty with political uncertainty have been curbing the activity for real estate properties above the mark of £1 million during the past 4 years. This eventually led to heightened demand for high-priced properties.
- The appointment of Boris Johnson as the Prime Minister of the United Kingdom might also work in favour of the real estate market in years to come.
- Prime Minister Boris Johnson has already initiated the mulling of stamp duty remodelling. This will comprise of a complete reversal for increased stamp duty rates on the properties sold for more than £1.5 million.
- The new moves by Boris Johnson shall also involve abolishment of taxes on the properties that are sold for a price tag below £500,000.
- Rates for stamp duty for properties priced higher than £1.5 million increased from more 7 percent to a whopping 12 percent in the year 2014. As of now, just the initial £125,000 of the property is exempted from the stamp duty taxes.
Sale of Properties following Brexit Vote
The super-rich are now taking advantage of Brexit-induced decrease in the overall value for sterling. This has helped the financially blessed to purchase 3-times as many properties worth more than £10 Million as compared to what they could purchase before the referendum vote.
Around 300 homes were sold for a price tag higher than £10 Million this tax year as opposed to the previous one when just 100 were sold.
The main property market experienced the transaction levels rank up considerably after the voting for EU referendum.
However, towards the higher-end of the real estate market, activity levels amped up heavily as the ultra-wealthy buyers saw an opportunity to cash-in upon the rapidly declining prices.
The weakening of sterling directly means that a good chunk of the buyers come from the overseas. This means the declining properties rates have led to higher sales for the foreign investors who for long have been looking for a bargain deal.
Bottom Line
All-in-all, the current real-estate market for high-end properties in the UK is nothing less than a golden goose for the investors looking for a sweet deal. Brexit being postponed along with Boris Johnson taking over as the current Prime Minister of the United Kingdom has surely worked in favour of the high-end properties in the country with increased sales.
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