According to the recent London Prime Residential Sales Market Study by Chesterton Humberts, the residential property market in London showed resilience in the first quarter of 2012, although the economy slid backwards in spite of the economic downturn, the rise in the duty land tax and the weakness of two of its traditional drivers: stock and the urban work force. for rent
City bonus money is no longer an important part of high-end London real-estate purchases, and this tendency will continue. Morgan McKinley figures show that in March 2012 the number of new openings in financial services was 56.5% fewer than in March 2011, although the FTSE 100 was 2.4% lower at the same time.
Overseas purchasers contributed for just under 54% of all Chesterton Humberts sales in London, while in Mayfair they were significantly higher – over 70% and over 80% respectively in Docklands, Hyde Park and Kensington and Chelsea. In the recent eurozone instability, many southern Europeans may have been affected by investing in the London property market and electoral outcomes in France, Greece and Russia may have gained attention in the future months.
"The premium London residential market continues to outpace the UK property market and customer demand is not likely to decrease. Chesterton Humberts CEO, Robert Bartlett, said of the World Property Channel. With limited stock levels, we expect prices to continue to climb in the top districts of London." It is also too early to evaluate the entire impact of the fiscal actions in the budget. We feel that the hike of the SDLT's top rate to 7 percent would easily be absorbed, whereas assets worth above £2 million are more negotiable. The proposed introduction in April 2013 of an annual ownership fee and a capital gains tax on disposals of assets held in corporate wrappers is more problematic and requires a clearer application of the provisions. The property industry, on the other hand, will have the chance to encourage the government to examine possible disadvantages in the next consultation process, particularly with respect to the bad signals it sends to international investors."
"While the growing eurozone crisis certainly does not serve the best interests of the United Kingdom, it might also lead to higher demand from overseas purchasers, who consider London a safe haven for their money. Moreover, in the event of a partial or entire fall of the euro, Sterling will represent a reasonably strong and safe capital flight currency."