It’s been a very strange summer in the Notting Hill and Kensington property market. We were all caught a little off-guard by the election result in May; as the new majority Conservative government was formed everyone got rather carried away with predictions of a sharp rise in property values on the back of a stable government with more favourable housing policies (no messy coalition, no mansion tax!) Sellers were encouraged, often by their agent, to set their prices higher in the expectation that buyers were ready to snap up their piece of the London market in the post-election euphoria. They were wrong and few buyers followed the same logic, which resulted in a market awash with stock available at inflated values. What ensured during the summer was a stalemate where few buyers were prepared to offer the prices that vendors wanted on the properties available. Towards the end of the summer this was being corrected and sellers started to reduce prices, by as much as 10%, resulting in the market being pegged back to where we started pre-election.
Looking forward to the autumn, the lower end of the market is now moving freely with properties under £3million attracting plenty of interest, often from those that held off buying earlier in the year. However, the top end of the market is a different story with the new stamp duty regime having a huge impact on transactions. A property purchase of £10million now carries a stamp duty burden of £1.14million – quite an eye-watering tax bill and one which many purchasers are finding hard to swallow. For the time being the very top of the market is only really performing if properties are well-priced which suggests that sellers are indirectly taking their share of the large tax burden. We will watch with interest how this end of the market fares over the coming months.
HMRC stamp duty calculator – a useful tool for those looking to buy!
Michael Wilson, Head of Sales