Non-dom changes and tax worries ‘stalling Prime Central London’
Prospective tax changes in the impending budget have caused buyers to become more cautious in prime housing markets says Savills' Lucien Cook.
House prices in in Prime Central London fell by 0.7% durin the third quarter of the year and by 1.1% on an annual basis, according to the latest data says Lucian Cook (pictured), head of residential research at Savills.
In contrast, within the predominately needs-based outer London areas prices grew marginally over the past three months by 0.2%.
Concerns over what the budget may hold have made buyers more cautious.”
Cook comments: “We would usually expect the top end of the market to be the first to react to improved market conditions, concerns over what the budget may hold have made buyers more cautious, especially in the most discretionary prime markets.”
Tax burden
The small price falls in prime central London neighbourhoods, reflect a prospective increased tax burden which ranked as the top buyer concern (73%), according to Savills, followed by general market uncertainty (36%).
Cook adds: “Tax concerns, including changes to non-doms tax status, have caused potential buyers in central London to take stock of their situation.
“However, while there is plenty of anecdotal evidence of people reviewing their tax status, there’s little evidence of this resulting in more stock hitting the market.”
“Although there is speculation about what the October Budget may bring, the downside risks in these markets are mitigated by the fact that values remain low in a historic context, and by the enduring appeal of the capital, which will ensure that even those affected are likely to keep a base in prime London neighbourhoods.”