How The Budget Could Affect Prime London
The Autumn budget was announced on the 26th of November, and the revaluation of council tax bands is being viewed by many in the property industry as introducing a form of Mansion Tax.
Demand holds, despite policy disruption
Pre-budget speculation and new tax measures have created uncertainty, yet buyers are remaining active. London continues to draw domestic and international purchasers because of its cultural offer, education, dining and commercial relevance.
Recent activity at the top end of the market underlines this. Over the past two weeks £135 million of transactions have completed across Prime Central London with 11 deals averaging £10 million. Likely due to the cultural, fine dining, retail, educational and other lifestyle attractions the city has to offer.
Who is buying?
The most active groups in the £5 million to £30 million range remain:
- Middle Eastern buyers from the UAE, Saudi Arabia, Kuwait and Qatar
- Long-term UAE and Saudi residents originally from India, Pakistan or the UK, now the largest overseas buyer group above £5 million
- Asian buyers from mainland China
For these purchasers London represents relative value. Prices in Dubai, Abu Dhabi and Saudi Arabia have moved sharply, while London has remained more stable.
The risk: weakening london's primary residence appeal
Escalating property taxes risk pushing globally mobile businesspeople and UHNWIs towards lower tax hubs such as Dubai, Abu Dhabi, Monaco or the French Riviera. This matters because London needs primary residence buyers, not only secondary home purchasers, to sustain long-term employment and investment.
As Jeremy Gee, Our Managing Director highlights, “Primary home buyers are what really helps to generate employment and investment in London, but with tax rises the government are in danger of repelling rather than attracting these types of buyers who are essential for the long-term economic wellbeing of the UK capital.”
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