17 Sep 2012 Back

W.A.Ellis' overview of this week's property market - 14/09/2012

This week we said farewell to an amazing summer of sport in the capital, culminating on Monday with our Olympic and Paralympic Team GB athletes parading through the streets and a British tennis player finally clinching a Gram Slam title after 76 years. As with British sport, British property also looks to the future this week and W.A.Ellis attended the RESI 2012 conference, alongside 1000 residential industry leaders. 

This year we found that the pertinent issue, most notably campaigned by Tony Pidgley of Berkeley Homes, has been the impact of the increase in Stamp Duty Land Tax on transactions above £2m, particularly on those to non-natural persons. Berkeley stated that their sales between £2-5m were down by 30% year on year. While Pidgley believes the property industry should be petitioning the government to encourage foreign investment into the UK, citing the statistic that for every new home built 3.5 jobs are created, independent think-tanks are now mooting the restriction of foreign investment in central London. Any restriction should be resisted at all costs, as it is grossly damaging to the economy and will actually reduce SDLT revenue. 

Pidgley also stated that 50% of Berkeley's sales are to international investors, with 30 units recently sold to French buyers. The first time that he can remember "selling to a Frenchman"! Meanwhile, mainland China is a huge nascent market, with investors focusing on long term investment in London, particularly with their children's education in mind. Our taxation system must remain attractive in order to compete with other popular Chinese investment destinations, such as Vancouver and New York. 

Turning to the development market, W.A Ellis’ Oliver Gibson reports that the primary barrier to entry remains around financing restrictions, with planning bureaucracy following a very close second. Despite this, the current development pipeline is impressive, as we have previously reported, particularly in Battersea and the South Bank. The conference closed with an interesting presentation regarding the future of the Athlete's Village in Stratford, which is a pioneering development of several thousand residential units, built to let as a long term rental investment. 

Back on W.A.Ellis’ home ground, the residential rental market has continued with the frenetic start reported last week. Enquiry levels are still on the up and the high net worth student enquiries that were abundant at the end of August have slowed, as stock levels at this end of the market have been snapped up by the usual end of summer rush to secure a property in time for the start of the academic year. This week has also seen a healthy number of tenancies agreed across the £1,000-2,000 per week range and increased enquiries for family apartments and houses. This is a welcome start to the Autumn as September’s momentum moves forward into October. 

With best wishes 

Kerry Morley, Associate

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