Sub £2m prime Central London stock low
And while August has been a strong month for the firm with 12 sales agreed in the past four weeks new properties are slow to come onto the books to replace the stock.
Richard Barber, partner in residential sales at W.A.Ellis, said: “There is renewed appetite for investment within the prime Central London market but stock levels are low particularly below £2m due to the stamp duty threshold. As such we are anticipating strong price increases within this sector of the market over the coming months.”
David Hollingworth, associate director of London & Country, said: “Homes below the £2m threshold don’t stay around for very long hence why prices are rising so quickly in London. Supply may be unable to keep up with demand because there is a clogging up of home mover activity in this bracket because those who own property just below the threshold may, understandably, not able to afford to step up the ladder. But there is also an issue with a lack of new build in this price range which is hampering supply even further.”
Julian Ingall, director at Coreco Specialist Finance, said developers, when assessing the viability of a residential scheme, will take greater care around certain hot spot values.
He said: “Due to the strength in the London residential market it is often difficult for developers to anticipate values in the future especially around key stamp duty increases such as below the £500,000 and £2,000,000 as artificial surges have occurred around these prices.
“Last year was a classic example of tax matters affecting the property market for much of 2012 there was a great deal of uncertainty especially for foreign buyers due to the lack of clarity surrounding the position on wealth tax and stamp duty for un-natural persons (foreign companies, partnerships and funds) and many of the high end value property sales were stalled as a result.
Bridging lender Omni Capital told Mortgage Introducer at a recent round-table that certain high profile developers were steering clear of zone one because it is an area which has developed beyond its value and developers are fearful of the super-inflation of prime Central London.