While the UK housing market remains remarkably resilient amid political and economic uncertainty, there is no denying the fact that tax changes are presenting problems for some homeowners and prospective buyers, especially in London.
Stamp duty, in particular, continues to have a detrimental effect on the housing market, most notably in smart areas like Fulham, where properties command a price premium, with a 10% levy charged up to £1.5 million and 12% above that figure, which is unsurprisingly having an adverse affect on the market, as reflected by fewer property transactions and lower prices over the past 18 months or so.
There was a golden opportunity to provide a boost for the local housing market by doing something about the higher rate of stamp duty in last week’s Budget announcement, and yet it was conspicuously missed – in fact, somewhat unbelievably, housing did not even get a mention in the statement. Zip. Nada. Zilch. Nothing… the residential property market was completely forgotten. Totally ignored.
Yet, despite everything, there has actually been a significant improvement in sales volumes in and around Fulham since the turn of the year as domestic purchasers seek to take advantage of lower asking prices, while the weak pound has made property in this prime part of the capital even more enticing to international purchasers.
Prices in the sub £2 million market are typically no longer falling, while values in the £2-5million price bracket are now broadly stable.
Exceptional properties are starting to command high rates per square foot once more, which in some cases are approaching a similar level with 2014 peak values, thanks in part to stronger than initially expected post-EU referendum sentiment.
But while this is encouraging moving forward, the market will still be mindful of potential external influences as Prime Minister Theresa May prepares to trigger Article 50 to start Britain’s complex negotiations to exit the European Union. Nevertheless, both Fulham’s demand and sentiment now appear to be stronger.
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