2018 got off to a subdued start, with sellers of homes priced in excess of £1m in London finding it toughest to find buyers in January, according to a survey of estate agents. Across the UK as whole, the volume of sales, new buyers, and properties coming onto the market fell in January, the Royal Institution of Chartered Surveyors said. Of the estate agents surveyed, 67% said the sales price achieved on homes priced at £1m or more had come in below asking price. The figure dropped to 56% of agents for properties listed between £500,000 and £1m. For the UK overall, agents are expecting house prices to be roughly flat in the coming months.
In the difficult market we find ourselves in today, there is no substitute for experience and local knowledge. Nicholas Jaffray of Jaffray Estates has worked in Marylebone for the past 10 years and it is this experience has been key in achieving sales in the area.
Spotlight on Tax Changes on London’s Residential Property
London property has always been a major source of government tax revenue from Stamp Duty Land Tax receipts (SDLT), Capital gains Tax (CGT) and Inheritance Tax (IHT). It is often suggested that IHT is only paid by those who are living in London.
Property is often viewed by governments as an easy way to raise taxes without too much political fallout. The London property market has suffered a numer of tax changes over the past few years, bringing into question whether the government have now gone too far.
Analysis by KPMG shows that in the 15 months after April 2016, the volume of London property transactions was down 15% compared to the 15 months prior. Of course, the fall in transaction volumes has had a direct impact on prices, particularly in prime central London.
Below we list the most notable tax changes since 2012:
April 2012: a special 15% rate of SDLT where a company buys residential property
April 2013: an Annual Tax on Enveloped Property (ATED) – effectively a rental charge payable to the government where a company owns property valued in excess of £500,000
December 2014: a reform of the SDLT bands, replacing the SLAB system, and increasing the taxes paid on property transactions in excess of £940,000
April 2015: the introduction of Non-Resident Capital Gains (NRCGT) tax on property
April 2016: an additional 3% SDLT rate on purchases of second homes, including buy-to-let, and a special rate of CGT on residential property
April 2017: a revision of IHT rules to ensure that offshore structures cannot be used to shelter residential property from IHT
As a global city, London competes with other major international locations, and if the government is not careful, London risks losing out to other cities such as Paris. Perhaps London’s competitiveness or ability to compete has been overlooked when introducing recent tax changes.
Jaffray estates and The Marylebone Journal
The Marylebone Journal is owned and supported by both The Howard de Walden and Portman Estates, providing Jaffray estates and their clients with the best local exposure in the Marylebone area. Jaffray Estates will be advertising with the Journal throughout 2018 along with some editorials. This month Ellie Costigan, from The Marylebone Journal, interviews Nicholas Jaffray in their ‘Ask the Experts’ section on living, buying and selling in portered mansion blocks, see below.
New Instruction: Portman Square
Jaffray Estates are excited to offer to the market a 3 bedroom apartment that has been owned by the same family for over 30 years. This bright apartment is well positioned in the building, occupying the north west corner on the 6th floor, enjoying far reaching views, predominantly west facing and also north towards Primrose Hill.
The property requires full modernisation, providing an opportunity for someone to design their own apartment, and totals 1,205 sq ft / 111 sq m. Currently there are 3 generous sized bedrooms and 2 bathrooms as well as a utility room. Subject to the necessary building consent, the buyer can create an en-suite bathroom and two further shower rooms. The L-shaped reception and dining room offers a particularly bright living space and there is a separate kitchen.
This apartment has the advantage of an extremely rare parking space also available for sale within the building.