Prime Central London (PCL) property transactions are stabilising, according to a leading property consultancy, with sectors of the market recording year-on-year growth.
Research by consultancy W.A.Ellis shows that between January and August 2014, there were 1,242 PCL transactions compared with 1,288 for the same period in 2013, which represents a year-on-year reduction of just 3.5 per cent.
Whilst the Damoclean sword of mansion tax continues to hover over the PCL market, these figures suggest that it has not as yet impacted. Indeed, sales between £2,000,000 and £5,000,000 have increased by 11.7 per cent this year, added W.A.Ellis.
However, sales of properties over £5,000,000 have diminished by 5.5 per cent. The reduction in activity in the £5,000,000-plus bracket is perhaps indicative that the foreign investor may tolerate a tax of £15,000 per annum (based on the current ATED charges) but not the more punitive £35,000 charge per annum currently applied to properties held in company names with values in excess of £5,000,000.
Meanwhile, in the London lettings market August had a surprisingly high level of activity in what is usually a very quiet month – according to W.A.Ellis, there was a 14 per cent increase in tenancies starting compared to the same month last year.
A spokesperson said: “The seasonal student market is in full swing, with students focusing on finding accommodation for the upcoming year and demand exceeding supply. We agreed two ‘Face-Time’ deals this month… in South Kensington and Hertford Street.
“This highlights a new breed of techie tenants who are savvier than ever before in their approach to the property market. We are also noticing an increasing trend of tenants coming back to the market and looking for new rental properties as a result of their landlords opting to sell ahead of the new capital gains tax, which is set to affect foreign owners from 6th April next year.”