It’s a rare moment when we can say that the prime housing markets beyond the capital have performed better than London. But that has been the case since the middle of 2014.
The introduction of higher rates of stamp duty and a 3% surcharge for additional homes have shaped the prime market. Increased exposure to capital gains tax for international buyers cooled the prime central London market, while Brexit uncertainty compounded this effect across the prime London market as a whole. The surprise UK election announcement will add to the uncertainty in the short term, but is unlikely to change the shape of our forecasts.
In the state of the market (p4), Katy Warrick looks at the situation for buyers and sellers in London, and at what the future holds. Kirsty Bennison takes up the story beyond London. Although not immune to tax pressures, the prime suburban markets have been less exposed, resulting in modest price growth and some interesting emerging trends.
Clearly, sellers have had to adjust their expectations. In prime central London, there is evidence that the market understands this. In the rest of prime London, the market seems further from acceptance, meaning the gap between buyers’ and sellers’ expectations is wider. That is contributing to a greater pool of overpriced stock. Even if values do not fall much further in this market, sellers’ expectations of them will have to.
Source : Savills