Slow Increase On The Price For Luxury Real Estate In London After Tax Increase In May
The prices on luxury homes within the central London area have made the least
amount of increase over a span of nine months in May shortly after the British
government had decided to implement an increase in taxes for purchases on home
properties worth at least 2 million pounds and above.
According to early real estate reports for the month of May, the value for houses and
apartment properties on the market with an average cost of 3.7 million pounds have
increased by as much as 10.7 percent compared to the year before. The increase marks
a 0.7 percent increase in comparison to prices in the month of April.
The increase in taxes — referred to as “stamp duty” — was implemented by the
Chancellor of the Exchequer George Osborne who declared that the 5 percent tax
which was set in March is to be raised to 7 percent in May.
Researchers have observed that the housing market seems to have taken on the 7
percent tax rate relatively well. In fact, the prices for home properties which have
values that exceed 2 million pounds have increased by as much as 1.6 percent over the
last two months while all-luxury property options on the market have increased by as
much as 2.7 percent.
Luxury property options within London have increased by as much as 12 percent ever
since the market hit its peak in 2008 and that includes a 4.7 percent increase within
2012 as the scarce number of homes available within the market inventory has driven
property values up across the city.
The on-going debt crisis in Europe has urged many foreign investors to seek out real
estate within London in the hopes of successfully preserving their existing wealth.
Among the many different nationalities which are have been seen taking an interest
in London’s property market are nationals from France, Spain, Italy, and Germany. In
fact, such foreign interest has been noted to have made an influence to the nineteen-
month consecutive streak of price increases within the city.
Since 2008, foreign buyers have been responsible for an estimated 60 percent of all
home purchases that were made within the most expensive areas within London. In
turn, these foreign buyers account for the majority of residents within the Kensington
and Chelsea area as well as the City of Westminster.
The price for houses across the nation has increased in May — a first in three months
— due to insufficient numbers of homes for sale on the market. Compared to April,
values increased by 0.3 percent despite having dropped by 0.7 compared to April of
2011 to an average sales price of 166,022 pounds.