The residential property market in London could be set for major changes over the next two years. The revision of stamp duty and the announcement of new taxes on buy to let properties and second homes could lead foreign investors to sell the homes they have purchased in new developments taking place across the capital. Many of these will have been reserved when the projects were announced but new changes will see the costs rise, particularly for those homes that won’t be finished before April. The end result could be an influx of new properties arriving on the market over the next two years.
In 2016 and 2017 it is expected that around 60,000 new homes will be completed in the capital. Of this number between 50 and 60% will have been purchased by foreign investors. The new higher costs will eat into their potential profits and could result in many of the properties being put up for sale. It is not beyond reason to anticipate that around 30,000 new homes will therefore become available for buyers.
The prospect of the higher fees is already being felt with some developers seeing buyers calling for their reservation fees to be returned. This could also result in more properties entering the market in the future as the number of off-plan reservations could fall.
If the number of properties expected to enter the market is accurate it could cause prices to come down, particularly because supply would close the gap on demand substantially. This could provide plenty of opportunities for people to purchase a home, thereby meeting the Government’s plan to boost home ownership.
The period will be a challenging one for investors. At Finefair we will be on hand to help clients with their investment properties in Lambeth and throughout the rest of London. We manage a huge portfolio of properties and offer a bespoke service to each and every client. If you would like help, advice or professional services please contact us. We will provide up to date information and our expert opinion.