London-Agencies
London's luxury home prices have risen significantly on the back of strong demand from overseas, despite expectations that growth will be weakened this year by government measures to impose a stamp duty tax for certifying documents.7 percent, meaning prices are up almost 3 percent year-to-date, according to new data from Frank Knight, the estate agent specializing in high-end property transactions, and over the past 12 months, high-end property prices have risen 7.7 percent in the British capital.
This growth comes despite predictions by four high-end real estate agencies that growth would be zero in 2013 due to the impact of the government's ratification tax measures introduced in last year's budget.
The estate agency's research indicates the extent to which the dynamics of the London market have changed in response to the new levies. Although there was a fall in the number of sales of properties priced between two and three million pounds in the capital in the 12 months to the end of March, there was a corresponding 6 percent increase in the number of transactions in properties worth less than two million pounds. This suggests that some sellers lowered the prices of properties below EGP 2 million in order to escape the high 7 percent tax.
Many real estate agents in London say: Overall demand for housing in high-end areas of central London has returned since the beginning of the year, driven largely by foreign buyers.
Savills Real Estate said: The unexpected growth in prices can be partly explained by the decline in the value of the pound, which means London still looks cheap to foreign buyers. Ed Mead, a board member at London real estate agency Douglas & Gordon, said: “There is little sign of foreign buyers” appetite waning."
According to Knight Frank, dollar-denominated buyers can buy trophy homes in the capital at a 7 percent discount to peak market prices in 2008, while buyers from Hong Kong enjoy an 11 percent discount. British buyers have to pay a premium of 17 percent.