Despite the Budget announcement in March to raise stamp duty to 7% for individuals and 15% for those buying as non-natural persons, both prices and applicant numbers rose in Prime Central London during April, according to a new study by London-based real estate consultancy firm Knight Frank. Main suppliers
Highlights of the Report:
In April, prime Central London prices increased by 1.1 percent.
The number of new £2m+ applicants increased by 13% in April compared to March, indicating that prospective buyers were not deterred by the stamp duty hike.
Contract sales increased by 50% in the three months to April compared to the same time last year.
Following election candidate Francois Hollande's plan for a new wealth tax, French web searches for Prime Central London property spiked in February.
"Early indicators of the effects of recent reforms to stamp duty are that the sector is proving resilient so far," Liam Bailey, Knight Frank's Head of Residential Research, tells World Property Channel.
There was an increase in the number of £2m+ exchanges in March, as there was after last year's stamp duty hike, and the number of transactions in April is higher than in April last year. It's worth noting, however, that operation was relatively low in April. Our buyer behavior indicators often paint a good image. Applicant volumes were not only higher in April than in the same month last year, but they were also up 13% from the previous month, indicating that the stamp duty adjustments have not deterred potential buyers. Although the number of viewers decreased by 7% in April compared to March this year, it was still higher than April 2011. Meanwhile, spooked by French election candidate Francois Hollande's talk of wealth taxation, there has been much talk of wealthy French buyers flocking to London. Is there any truth to the rumor, though? The response is no, not yet, in terms of exchanges. In the first four months of this year, Knight Frank saw only one more sale to a French national than in the same timeframe last year. However, there is anecdotal evidence of rising interest, as shown by the number of walk-ins registered by our offices and the number of potential buyers searching online. Looking at search activity on Knight Frank's Global Property Search platform, we can see that as the eurozone crisis struck in May 2011, the number of French web users viewing prime central London properties on the site started to rise. While activity decreased later in the year, there was a significant increase in February (68 percent year-on-year growth in property searches), which coincided neatly with Hollande's proposal for a 75 percent tax on top earners.