Latest London Property News: March 2021

In Q1 2020 London’s prime market was frantic. Following the general election and Brexit, new instructions in January 2020 rose 28% compared with the same month a year earlier and there were signs that we were building up to a busy spring. But, with the onset of a global pandemic, this was not to be. Instead, we saw new listings delayed and activity shift to the second half of 2020. Moving into 2021, new instructions fell 15% compared with January 2020 and were 22% lower than the previous five-year average (2015 to 2019) too.

With stock levels building in the latter part of 2020 there are still more homes on the market today than there were at the same point a year ago. At the end of January 2021, stock levels were up 42% on January last year, a small fall from the previous month when December saw a 51% annual increase in available properties. As well as fewer new instructions, properties going under offer dropped in January too. January 2021 saw 5% fewer properties go under offer than in January 2020. But the impact of a strong January market last year is at play here too. Indeed, the number of homes put under offer in January 2021 was higher than in January 2017, 2018 or 2019. Each of the last six months of 2020 recorded an annual increase in properties going under offer. These deals have now progressed to the point of exchange, which means we are beginning to see a rise in sales volumes. The number of homes sold in January 2021 was up 4% on January 2020 and 3% higher than the average number of January sales between 2015 and 2019.

Between November 2020 and January 2021, achieved prices rose 1.8% compared with the same period a year earlier. Taking January in isolation shows a similar increase, up 1.6% in January 2021 compared with January 2020. Houses continue to see higher annual increases in prices than flats. Flats sold between November 2020 and January 2021 saw achieved prices rise 0.4% compared with the same period a year earlier, this compares to a 5.2% increase for houses.

Between November 2020 and January 2021, achieved prices rose 1.8% compared with the same period a year earlier. Taking January in isolation shows a similar increase, up 1.6% in January 2021 compared with January 2020. Houses continue to see higher annual increases in prices than flats. Flats sold between November 2020 and January 2021 saw achieved prices rise 0.4% compared with the same period a year earlier, this compares to a 5.2% increase for houses.

However, with a more concrete view of when normality will return and the recently announced stamp duty extension, we expect there will be a steady increase for prime UK property which will cause property values to climb as we head towards the spring.

Budget 2021

What a difference a year makes. On Wednesday the Chancellor delivered his second Budget in a very different environment from last March, amidst the COVID-19 pandemic, an economy which shrank by 10% in 2020 (the biggest reduction in 300 years) and borrowing at its highest level outside of wartime. He drew a careful balance, announcing that it would

“be irresponsible to withdraw support too soon and irresponsible to allow borrowing to rise un-checked”.

Two key proposals, the extension of furlough arrangements and the Stamp Duty Land Tax holiday, had been pre-announced. Generally, he shied away from overt tax increases, preferring to raise money through a package of fiscal drag measures while accepting that his wish to achieve sustain-able public finances will have to wait. The speculation that Capital Gains Tax rates would increase in line with Income Tax did not materialise, although he did announce that Corporation Tax rates will rise in 2023. Fortunately, the Budget has provided continued financial support for many sectors and workers while not adding an additional burden of significant tax increases.

Stamp Duty Land Tax Extension

As was widely trailed in the press, the Government has extended the temporary increase in the residential Stamp Duty Land Tax (“SDLT”) Nil Rate Band to £500,000 in England and Northern Ireland until 30 June 2021. From 1 July 2021, the Nil Rate Band will reduce to £250,000 until 30 September 2021 before returning to its ‘normal’ level of £125,000 on 1 October 2021. Note that, in most cases, the date of completion of the property purchase is the key date (although it can be earlier if a con-tract is ‘substantially performed’ before this date).

As was widely trailed in the press, the Government has extended the temporary increase in the residential Stamp Duty Land Tax (“SDLT”) Nil Rate Band to £500,000 in England and Northern Ireland until 30 June 2021. From 1 July 2021, the Nil Rate Band will reduce to £250,000 until 30 September 2021 before returning to its ‘normal’ level of £125,000 on 1 October 2021. Note that, in most cases, the date of completion of the property purchase is the key date (although it can be earlier if a con-tract is ‘substantially performed’ before this date).

The extension is also good news for funds and property companies investing in the build to rent or private rented sector. While the value of claiming ‘multiple dwellings relief’ has been eroded for those caught by the 3% higher rate on additional dwellings (and from 1 April 2021, those who will be caught by the new 2% non-resident surcharge), the extension of the ‘holiday’ will benefit many buyers, particularly those investing in purpose-built student accommodation and private rented accommodation with mixed-use elements.

Recently Sold:

Fifteen Portman Square, Marylebone W1H | £1,350,000

Jaffray Estates have just sold this best in class 6th floor 1 bedroom flat in an Art Deco block at a prime Marylebone address. A complicated sale including a simultaneous lease extension with The Portman Estate, a new tenant for the buyer, and of course lockdown – sold at asking price. We sold this flat for the first time 3 years ago, helped with the interior design with London interior designers 1.61 London , arranged the extension of the lease via our lease specialists Symington Elvery, and then sold it for the 2nd time!

Contact Us

If you are currently trying to sell your property, or are considering selling in the near future, and would like some straightforward advice, then please contact Nicholas Jaffray by telephoning: 020 3091 9311 or via email at: Nicholas@Jaffray-Estates.co.uk.

Full details of all our current properties for sale can be found via the company website: www.Jaffray-Estates.co.uk/Property-For-Sale.

We hope you and your families are keeping well during these challenging times.