Towards the end of 2014, many property experts predicted a decline in the London market during the year ahead. However, as we reach the end of 2015, it seems that the outcome has been a lot more positive.
Many made an assumption that the taxation policy changes, specifically stamp duty, would damage the property market. This proved not to be the case. With all properties sold for less than £935,000 in effect having less tax levied against them than before, the changes actually helped to stimulate the market. Both sales and the average value of property in London increased during 2015, and it seems that the changes to taxation were one of the factors that made this possible.
It is of course the case that properties valued at over £1million are now subject to higher tax. This is the area that much of the press focused on when predicting a fall in the market. While London is home to some very significant and eye-catching high value buildings, these kinds of properties make up only a small percentage of the overall property market. Properties priced around the average for the London market were able to take advantage of the tax changes as a stimulus for sales.
Another factor which a number of commentators suggested would harm the London property market was the expected fall in non-UK property buyers. This did indeed happen, but not to the detriment of the market. A fall in the number of non-UK based buyers of London property was matched by an increase of some 15% in UK based buyers. We knew that while the location of investment property buyers might change, the level of demand for property in London was unlikely to fall.
As you can see, various factors which were initially seen as negatives did in fact have a very positive effect on the London property market. All the indicators suggest that 2016 will continue this pattern. We look forward to helping you with all property matters throughout the New Year, continuing to provide full property management in Islington, Kensington and Chelsea, Hounslow and all other London Boroughs.