In the recent Budget, it was announced that there will be a 3% increase in stamp duty for second homes and buy to let investments. This has resulted in concerns that the changes would dampen or otherwise weaken the London property market. However, when it comes to making investments in London, it is unlikely that the changes will have a negative impact on either the demand for property or the potential for success.
The exceptionally high levels of demand for property in London, and the driving forces behind that demand, have not been affected in recent years by pricing or taxation levels. It seems likely that the new higher rate of stamp duty will also not curb the potential for returns on investment.
In terms of growth projections for London property, there is a significant level of consistency amongst analysts. A general overview shows a projected 4.5% increase per annum in the value of London property over the next five years, with rental and leasing fees expected to increase by between 30% and 35% over the next decade. While the recent increase to stamp duty is hardly an ideal situation for landlords and investors, we can nonetheless see how the impact is likely to be absorbed by the growth potential of the market.
From our perspective, we know that at present the market is healthy and all the signs indicate that it will remain this way. On a practical level, we believe it would be fair to say the increased stamp duty should not be viewed in isolation, but in the broader context of increasing property values in London. With the city set to remain the cultural and financial capital of the world for quite some time, the constant demand means that the potential for property success remains. If you ever need any advice or support with the latest changes in the property marker, or with sales, investments, lettings or council leasing in Hammersmith and Fulham or any other part of the capital, get in touch with our team.