Last year was a year of mixed fortunes for the central London property market, and we believe 2013 will be similar. We saw glimpses of optimism and moments of serious concern reacting to events in the Eurozone and the Middle East.
In April 2012 a new level of stamp duty was introduced for properties sold over £2m. There has been much reporting of a significant drop in transaction levels between £2m and £4m as a consequence, although we haven’t experienced any significant drop in demand. In our view the primary reason for transaction levels being lower than expected is over-ambitious pricing. As you would expect in such a marginal market those who are buying are doing so with care and with a sufficient access to sale price evidence to ensure the price being paid is fair and reasonable.
So what lies in store for 2013? This New Year, we are pending the Chancellor’s announcement on how the government will tax properties held in company and ‘non-natural’ structures. It is expected that a new annual levy will come in to play in April 2013 along with a potentially aggressive CGT regime. This is in addition to the eye-watering 15% stamp duty band which came in to force last April for those who continue to purchase residential property in company structures.
In our view we expect much of next year to be as challenging as this year. Whilst we predict properties below £1.5m will continue to trade strongly we sense the mid-market will continue to tighten and that sellers will be forced to give serious consideration to their pricing strategies if they want to achieve a timely sale.
As is always the case, quality counts, so if you’re planning a sale make sure your property is presented at its best, and ensure you have an energetic agent working tirelessly to achieve the best possible result.
Director – Head of Sales, Mountgrange Heritage
Posted: 14 January 2013