Number of prime properties on the market up by 21.3% since the start of the year, as the impact of non-dom and tax reforms force investors out of London.
- Demand for prime central London property is currently at its lowest point since the start of 2015
- A huge slide particularly in the last three months has seen demand fall in key areas such as Maida Vale by 66%
- Have recent changes such as those to the non-dom tax status and the increase in stamp duty prompted investors to look for a profitable and high-yielding property investment in other areas in the UK?
Why is real estate in the most illustrious London addresses no longer creating the kind of fraught investor activity that the market has been so used to over the last 20 years?
The amount of property on the market in the capital has increased by 21.3% since the start of 2015, and by just 9.9% in the four months since the General Election, according to the latest Prime Central London Index by online estate agents eMoov.co.uk.
In the aftermath of the Conservative victory at the polls, demand from investors has dropped by 8%. The worst hit area is affluent west London suburb Maida Vale, where demand from June to October has slumped by 66%.
Investors thinking about entering the London market have had to contend with an increase in the rate of stamp duty and changes to the non-dom tax status by the government this year. For many, this may have started to reduce London property’s investment appeal.
“We, along with many others, predicted a tough time for prime central London since 2014, and it would seem this has now well and truly come to fruition,” said Russell Quirk, Founder and CEO of eMoov.co.uk.
“There were signs that the top end of the London market might be thawing when we ran our Prime Central London Hotspots Index back in May, but it seems it’s not just the British weather that has turned with a cold snap.”
It’s been a different story in other parts of the UK so far this year. In Manchester, for example, significant levels of institutional investment has been recorded in the city’s private rented sector, triggered by demand from one of the country’s youngest demographics for rental property.