The key changes affecting the property market were as follows:
• Stamp duty increased by 2% for properties over £2million to 7% from midnight
• Stamp duty on property owned by a non-resident entity increased to 15% with immediate effect
• Government to bring in new general rules to clamp down on tax avoidance as part of the 2013 Finance Bill plus a warning that this is likely to include retrospective measures

Prime property

I have to admit, the 2% stamp duty increase took the property market by surprise. It had been leaked to the FT that morning but no-one thought it would take effect immediately, so we were straight on the phone to our buyers for property over the new threshold and plans for Wednesday afternoon were scrapped as we assisted affected Clients to exchange before the midnight deadline, saving all concerned hundreds of thousands of pounds.

In the longer term, Manse & Garret Property Search are not forecasting significant change to prime property sales in prime central London. Clearly the £2 – £2.25m price bracket will feel some aftershock for a few months, but given the lack of supply and increasing demand for stock in the best areas, we don’t think the increase in stamp duty will have a marked effect.

However affected property just outside the centre is likely to take a hit. Popular areas from Richmond, Chiswick and Fulham to the West, Islington, West Hampstead and Muswell Hill to the North and Greenwich and Blackheath to the East are likely to suffer few sales between £2m and £2.25m in the months to come. Motivated vendors are likely to take a hit on price but many will stick to their guns and hold out for the extra hundred thousand and these sales will stick.

Although about 80% of the prime central London market is dominated by overseas investors and many people buy using a corporate structure, in the grand scheme of things, given the capital gains which are routinely made in prime central London, we don’t see the new rules making a difference to price. After all, the best apartments on the best roads from Knightsbridge, Belgravia and Mayfair to Chelsea and Notting Hill are appreciating at circa 20% per year. Most investors will hold prime central London real Estate for 3 years or more so although the 7% stamp duty is an irritation, it won’t make a difference to the logical investor. Also the factors driving the prime central London property market remain, ie political instability in parts of the middle east, the rise of emerging markets who want to keep their offshore earnings offshore but in a stable political and economic situation and global economic uncertainty which favours prime central London real estate as an asset class.

The good news for buyers is that the current low stock levels are likely to be improved for the next year or so, as those looking to sell, rush to do so, mindful of the threat of retrospective legislation, when it comes in in 2013.

Super-prime property

It is the buyers of super-prime property £15m plus who will suffer most from the budget 2012 and it will be interesting to see the effect on this area of the market. There is very little to choose from in this market, few are advertised officially and those which are available are frequently priced using a multiple of their true value. Most of these houses and apartments are used as pied-a-terres and I suspect some will struggle for a few months, while the tax advisors of the super-wealthy find a scheme to mitigate tax and the prospective buyers consider whether they still want an awe-inspiring place in the UK.

The sub-£2 million property market London and Country

There will inevitably be a number of investors with large portfolios of property held by offshore companies who decide to liquidate ahead of the 2013 Finance Bill. As a result we anticipate more stock coming to the market over the next year but whilst this will increase choice for buyers, we don’t think it will have a huge impact in price, although prices should hopefully stabilise this year and not make the significant gains seen during 2011.

Given the issues with very restricted supply and burgeoning demand, which are likely to continue, we definitely don’t see the measures reducing prices.

Technorati Tags: budget, capital appreciation, prime central London property, Stamp Duty, Tax

Tags: budget, capital appreciation, prime central London property, Stamp Duty, Tax

As property search agents we regularly instruct surveyors on behalf of our clients to carry out full building surveys and valuations – whatever the value of the property in question,  and we were therefore very interested in a story in The Telegraph this week about the increase in litigation from homebuyers against surveyors.

According to some solicitors there has been a 20 per cent increase in the number of people attempting to sue their surveyors. Falling house prices have led home-owners to launch proceedings against surveyors for over valuing their properties in the first place.

For most buyers, a valuation for mortgage purposes is for the bank – not the buyer.  This means that there is no recourse for the buyer if the valuation is incorrect, even though it is the buyer who has to pay for something that is essentially worthless!

Although we are property search agents, our job does not end once we have found the client their perfect property – and we always recommend that our clients pay that little bit extra for a full structural survey and valuation, whether they are buying a pied a terre in the city or a mansion in the countryside. Without a good survey you don’t know what you’re investing your money in, and although obvious warning signs such as subsidence cracks and damp can be readily spotted, more serious structural issues are often not as obvious.

If your dream home should be hiding any problems then you can decide whether to walk away, or re-negotiate the deal to compensate for any work that is recommended by your surveyor. At Manse & Garret Property Search we do everything within our reach to ensure that our client is buying at the right price.

Technorati Tags: House prices in London, London Buyer's Agent, surveyors

Tags: House prices in London, London Buyer's Agent, surveyors

Finding a property with outside space in central London can sometimes seem quite a feat (especially if property finding isn’t your raison d’etre, as it is for us London buyer’s agents here at Manse & Garret Property Search!)

With summer approaching the number of buyers eager for outside space increases; competition is fierce and flats with good roof terraces are very quick to go under offer, often sold to keen buyers enticed by the idea of entertaining friends and family on a warm summer evening surrounded by the bright lights of London.

Speaking as a London Buyer’s Agent, I am particularly referring to roof terraces, rather than the humble patio garden, as they are quite the in thing in property and quite understandably so. Patio gardens, often on the lower ground floor, overlooked by neighbours and more often than not lacking in natural light find it hard to live up to The Roof Terrace which is much more likely to provide breath-taking views of London, great entertaining space, and an excellent opportunity to sunbathe, if that’s your thing.

Flats with patio gardens are usually on the lower ground and ground floors; less popular with buyers, especially the security conscious, and so tend to be 10-20% cheaper than a flat on the same road, but higher up. A flat on an upper floor with a good roof terrace, however, is likely to be worth about 10-20% more than a flat on the same road without outside space and will sell much more quickly, and if you are a property investor, it is worth noting that a property with a roof terrace is much more likely to be rented out more quickly and produce a better yield.

If you’d like to find a property with a roof terrace to rival Vista at the Trafalgar and Kensington Roof Gardens then give the best London Buyer’s Agents, Manse & Garret Property Search a call today.

Technorati Tags: London Buyer's Agents, London Flats, London property, London property finders, London search agents, outside space, summer

Tags: London Buyer's Agents, London Flats, London property, London property finders, London search agents, outside space, summer