Change the scale of Stamp duty was the cause of decrease in rates on rent of elite real estate in London

Rents in Prime Central London fell for the first time since February 2014. The level of supply in the luxury real estate market of London is quite high, at the same time, demand from the financial services sector is uneven on the background of fluctuations in global economic background. A fall of 0.1% in July 2015, was recorded for the first time since February 2014 and that means annual growth now at 2.9% , whereas in may 2015 the annual growth was 4.2%.

The elite real estate company Knight Frank has published its latest report on the rental market of elite real estate of London.

A slight decrease in the growth of rental rates is due to the increase in the number of each rental property coming onto the rental market and withdrawn from market sales due to increased Stamp duty. The activity of buyers has decreased markedly in the price range of £1.1 million, where particularly strong was the noticeable influence of the increased Stamp duty. Annual growth in rental prices slowed down to 2%, as many homeowners decided to give their property to rent until the market digests the changes to Stamp duty. In the rental market of real estate began to feel the excess of supply over demand. Tenants have become more choosy and now the homeowner needed a little more time to pass the property in the lease, which, respectively, affected the growth of prices.

The demand for rental of elite real estate of London traditionally depends on the situation on the market of financial services, where there was some decline in optimism among bankers that has been confirmed by the research. Nervousness in the banking sector of London is associated primarily with the upcoming referendum on the British exit from the European Union, the crisis in Greece and volatility in the stock market of China.

Meanwhile, the long-term financial stability of the UK economy is evidenced by strong economic data indicators in July 2015

One of the world’s leading financial hedge funds – Brevan Howard again transfer its offices from Geneva to London, which also indicates the dominance of London as a global financial centre.

® Alice Morgan. G. 12.08.2015

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