The new scale of Stamp duty prevents the growth of property prices in the UK

Prices for luxury property across London increased on average by 1.6% over the last three months to June, inclusive. However, they are still 0.7% lower than a year ago.

Increased the size of Stamp duty and are quite large unsold stocks of real estate elite real estate in London, which came on the market after the elections in may 2015, and keep prices from more impressive growth.

This is the opinion of the estate Agency Savills, which specializiruetsya on the market of elite housing in London.

In the report Savills indicated that buyers are cautious especially in the upper price sector of real estate, where prices for luxury housing-class grew only 0.3% in the second quarter of 2015. During the year the price of property in London in this price segment fell 4.3%.

In the price range up to £1 million pounds some buyers are even slightly benefited from the introduction of a new scale of Stamp duty that had an immediate effect on prices – prices in this sector rose 2.4% over the previous 12 months. The mortgage market continues to constrain buyers stress tests introduced last year.

If at the beginning of the year, due to the influence of the political uncertainty before the elections, it was impossible to determine exactly what is the obstacle to activity in the market of elite housing, and now, when the political space was clear, it is obvious that the new scale of Stamp duty and the stress tests in lending – the most significant factors influencing the market.

Despite the fact that some sellers have raised their prices after the election, encouraged by the coming to power of the conservatives. Buyers are restrained by the above factors that are not willing to pay more. Thus, the market formed a gap between the expectations of buyers and sellers, which will further cause price adjustments.

In such circumstances, it should be stated that the market of elite housing in London has reached its peak in 2014 and in the short term we are unlikely to see an excess of these maximums.

® Helen Entree. 08.07.2015

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