{"id":3434,"date":"2019-06-28T16:08:00","date_gmt":"2019-06-28T16:08:00","guid":{"rendered":"https:\/\/bb.pixelanddot.dev\/market-update\/july-2019\/"},"modified":"2026-01-21T12:04:01","modified_gmt":"2026-01-21T12:04:01","slug":"july-2019","status":"publish","type":"market-update","link":"https:\/\/www.black-brick.com\/insights\/market-update\/july-2019\/","title":{"rendered":"July 2019"},"content":{"rendered":"<p><a id=\"one\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7859\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/NEW-story-1-WEB.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/p>\n<p class=\"intro2\">Johnson raises prospects of Stamp Duty cuts<\/p>\n<p>Boris Johnson, the frontrunner in the race to become the next Prime Minister, is reported to be mulling cuts to Stamp Duty in an emergency budget, should the UK face a no-deal Brexit.<\/p>\n<p>According to a report in <em><a href=\"https:\/\/www.thetimes.co.uk\/edition\/news\/stamp-duty-slashed-in-boris-johnson-no-deal-budget-tg7x050x9\">The Times<\/a>,<\/em> Johnson is contemplating abolishing the tax on homes worth less than \u00a3500,000, and reversing Stamp Duty increases on more expensive homes, introduced in 2014.<\/p>\n<p>\u201cA move to reverse the Stamp Duty increases put in place by George Osborne, when the top rate increased from 7% to 12%, would be very good news, particularly for the London market which has been suffering from an onslaught of tax hikes on property since the end of 2014,\u201d says Camilla Dell, Black Brick Managing Partner. \u201cThere is now clear evidence that the Stamp Duty increases have started to dent the tax take.\u201d <a href=\"https:\/\/www.gov.uk\/government\/statistics\/quarterly-stamp-duty-statistics\">Stamp Duty receipts<\/a> in England and Northern Island fell by 19% in the first quarter of 2019 compared with the same period in 2018.<\/p>\n<p>\u201cWe would welcome a review of current property taxation, particularly the 3% surcharge and proposed 1% additional charge on foreign buyers, which has had the effect of pouring glue into the market and resulting in a dramatic fall in the number of transactions happening on an annual basis,\u201d Dell adds.<\/p>\n<p>\u201cFurthermore, a move to cut Stamp Duty on homes below \u00a3500,000 would clearly benefit the first-time buyer market. In our opinion, this should only apply to first-time buyers and not investors,\u201d\u00a0she says.<\/p>\n<p>\u201cHowever, the market needs to treat promises made by Boris Johnson as he seeks election with real caution,\u201d she adds.<\/p>\n<p>The <em>Times<\/em> notes that a budget, which usually takes place in October or November, could be brought forward to September, to boost the economy ahead of a potential no-deal Brexit at the end of October. However, on the one hand Johnson has expressed confidence that no-deal can be avoided, while on the other, some Tory MPs have threatened to bring down a Johnson government to avoid such an outcome.<\/p>\n<p>Meanwhile, new research shows that, despite recent increases in Stamp Duty, London is ranked 12th out of 17 global cities in terms of the costs of buying, owning and selling prime property.<\/p>\n<p>Estate agency Savills considered a non-resident foreign buyer, purchasing a property for $2 million, which is not used as their prime residence. After holding it for five years, the property is then sold (with no capital growth assumed, avoiding the need to calculate capital gains tax).<\/p>\n<p>In such a hypothetical situation, a buyer of a London property would incur costs equating to around 13% of the value of the property \u2013 not inconsiderable, but comparable with San Francisco, lower than New York (at 14%) and considerably less than Singapore at 25% and Hong Kong at an eyewatering 33%. While Dubai, Beijing and Moscow carry a much tax burden (at 4-6%), London property is cheaper to buy, own and sell than equivalent real estate in Berlin, Madrid or Paris.<\/p>\n<p>\u201cIt\u2019s easy for buyers to be put off at the cost of Stamp Duty on more expensive properties in London,\u201d says Black Brick Partner Casper Harvard-Walls, \u201cparticularly in the context of its steep rise after 2014. But it\u2019s salutary to note that, overall, London is in the bottom third of this ranking in terms of overall transaction costs \u2013 it remains incredibly competitive as an international city.\u201d<\/p>\n<p>\u201cFor overseas buyers, London remains highly attractive in terms of its legal framework, the educational opportunities it offers to children and young adults, and its cultural appeal,\u201d says Dell. \u201cAnd, notwithstanding the current political uncertainty around Brexit, it is fundamentally politically stable compared with many parts of the world.\u201d<\/p>\n<p>London property has also become increasingly attractive in value terms, Savills notes, especially for foreign currency buyers. It funds that a property in central London worth \u00a35 million in June 2014 is now worth 15% less in sterling, but 21% less in euros, 34.4% less in Hong Kong dollars, and 35.2% less in US dollars.<\/p>\n<p>\u201cThese price reductions are making London increasingly appealing to dollar-based buyers,\u201d says Harvard-Walls. \u201cIndeed, as <a href=\"https:\/\/www.black-brick.com\/insights\/market-update\/june-2019\/\">we noted last month<\/a>, US buyers in particular are crossing the pond in search of property investments.\u201d According to data from Knight Frank, they are now the second largest group of overseas buyers, after Chinese purchasers. In 2014, they had fallen to seventh place.<\/p>\n<p><a id=\"two\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7860\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/story-2-WEB-2.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/p>\n<p class=\"intro2\">In for the long haul: London property outperforms<\/p>\n<p>It may be hard to believe for anyone who bought a property around the last market peak in 2014, but new data shows that, over the last 30 years, prime central London property has outperformed the UK stock market, farmland, collectibles such as antiques and stamps, and commodities including oil, gold, silver and copper.<\/p>\n<p>Knight Frank ran the rule over 13 asset classes, finding that a \u00a3100 investment made in London property in 1979 would be worth \u00a3575 today, with farmland coming in second place, returning \u00a3476. Modern furniture and stamps came in next, at \u00a3472 and \u00a3395 respectively.<\/p>\n<p>An investment in the FTSE 100 would have returned just \u00a3351, although it comfortably outstrips inflation, which has made \u00a3100 in 1979 worth \u00a3209 today.<\/p>\n<p>\u201cWhile prime London property prices have tailed off in recent years in response to tax changes and political uncertainty, the data underlines the fact that residential property is a good long-term store of value,\u201d says Knight Frank.<\/p>\n<p>\u201cWith prices having largely adjusted to higher taxes, the market is poised to strengthen, although political uncertainty is keeping activity in check.\u201d<\/p>\n<p>The research \u2013 and the accompanying dynamic graph \u2013 also illustrates the relative lack of volatility in property prices. It shows oil prices spiking and collapsing during the global financial crisis, while silver, too, has seen a number of price spikes in recent years in response to the risk of financial crisis.<\/p>\n<p>\u201cThis underpins what we\u2019ve been telling clients for a while now,\u201d says Dell. \u201cIt\u2019s hard to beat London property as a long-term investment \u2013 although the short-term pain can sometimes be hard to bear.\u201d<\/p>\n<p><a id=\"three\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7861\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/Story-3-WEB-2.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/p>\n<p class=\"intro2\">Zoopla calls the bottom of London Property market<\/p>\n<p>Zoopla has called the end of price falls in London\u2019s property market, predicting that price falls are set to ripple out into southern England. The property portal is adding its voice to a growing chorus of analysts who believe prices are set to turn, after what Zoopla describes as a \u201c<a href=\"https:\/\/www.telegraph.co.uk\/property\/house-prices\/end-londons-house-price-slump\/\">three- to four-year repricing process<\/a>\u201d in the capital.<\/p>\n<p>It calculates that the house price falls in London plateaued in October 2018, when 80% of areas in London were registering a drop in house prices over the prior 12 months. That figure is now 68%.<\/p>\n<p>It is forecasting that prices will remain stable over the rest of this year, before rising in 2020.<\/p>\n<p>\u201cIn our view, house prices in London are well on the way to re-aligning to what buyers are prepared to pay, albeit in a market with significant reduced sales volumes which creates scarcity and supports pricing levels,\u201d <a href=\"https:\/\/primeresi.com\/zoopla-calls-the-bottom-of-the-london-property-market\/\">said Zoopla\u2019s head of research, Richard Donnell<\/a>.<\/p>\n<h1><a id=\"four\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7862\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/Story-4-WEB-1.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/h1>\n<p class=\"intro2\">Camilla Dell to speak at <em>Spear&#8217;s<\/em>, FT event<\/p>\n<p>Black Brick Managing Partner Camilla Dell is to give her views on the state of the London prime property market at two prestigious events over the coming months.<\/p>\n<p>The first, the <a href=\"http:\/\/wif.spearswms.com\/\">Spear\u2019s Wealth Insight Forum<\/a>, takes places on <strong>1 July<\/strong>, at the Langham Hotel. There, Dell will join the High Net Worth Property Outlook panel, discussing the outlook for the market, trends to watch and the likely impact of political developments.<\/p>\n<p>She will also be speaking at the <a href=\"https:\/\/www.ftweekendfestival.com\/\">Financial Times Weekend Festival<\/a>, at Kenwood House on <strong>7 September<\/strong>. She will participate in a panel discussion moderated by the FT\u2019s property correspondent James Pickford. Tickets are available <a href=\"https:\/\/www.eventbrite.co.uk\/e\/ft-weekend-festival-2019-tickets-57397389136\">here<\/a>.<\/p>\n<p><a id=\"five\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7863\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/Story-5-WEB-1.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/p>\n<p class=\"intro2\">Acquisition of the month 1: Kensington Court Gardens, Kensington, W8 &#8211; \u00a31,350,000<\/p>\n<p>Our clients had been renting in London for more than 10 years but felt that, in the light of current market conditions, it was now the right time to buy. They wanted a lateral apartment, in Kensington and Chelsea, of at least 2,300 square feet, within a mansion block with a good-sized lift. Given the client\u2019s specific requirements, and with very limited supply either on- or off-market, the search was going to be challenging.<\/p>\n<p>So it proved. We undertook one of the longest searches in Black Brick\u2019s history, before, fully two years on, identifying a<a href=\"https:\/\/www.black-brick.com\/expertise\/case-studies\/kensington-court-gardens\/\"> stunning apartment<\/a> of more than 2,700 sq ft on the first floor of one of Kensington\u2019s best mansion blocks. The property had not been modernised for 40 years and only had 11 years remaining on the lease.<\/p>\n<p>We tapped our network to ascertain the likely cost of extending the lease and sought advice as to whether our client\u2019s proposed refurbishment would be permitted. On the basis of our research, we put forward an offer and agreed terms with the seller at \u00a31.35 million, \u00a3350,000 or 20.5% below the asking price.<\/p>\n<p><a id=\"six\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7864\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/Story-6-WEB.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/p>\n<p class=\"intro2\">Acquisition of the month 2: Primrose Gardens, Belsize Gardens, NW3 &#8211; \u00a31,395,000<\/p>\n<p>Our American clients were also looking to take the plunge after renting in London for some years and were seeking a three-double bedroom period property with a large garden. While they favoured Belsize Park, the area in which they were renting, their budget did not extend to houses in the area, and most of the flats with gardens did not offer three large bedrooms.<\/p>\n<p>However, we identified a wonderful <a href=\"https:\/\/www.black-brick.com\/expertise\/case-studies\/primrose-gardens\/\">two-bed garden flat<\/a> with permission granted to add another bedroom. We helped our clients obtain detailed quotes from our extensive network of architects, builders and surveyors, enabling them to accurately cost the work required, giving them the confidence to bid on the property. We found ourselves in a competitive bidding situation but, despite putting forward the lower of the two bids. our offer was accepted, highlighting the strength of our relationships with estate agents and their preference to work with us over an unrepresented buyer.<\/p>\n<p>Our trusted network of architects, surveyors and builders added huge value to this transaction, giving our clients the confidence to move ahead.<\/p>\n<p><a id=\"seven\"><\/a><img decoding=\"async\" class=\"alignnone size-full wp-image-7865\" src=\"https:\/\/www.black-brick.com\/wp-content\/uploads\/2021\/02\/Story-7-WEB.jpg\" alt=\"\" width=\"1200\" height=\"498\" \/><\/p>\n<p class=\"intro2\">Acquisition of the month 3: Cornford Grove, Balham, SW12 &#8211; \u00a3900,000<\/p>\n<p>Our repeat British clients whom we had previously helped buy their son their first London property then came back to us again for assistance in helping their daughter.<\/p>\n<p>It was critical that the property be on a quiet residential street whilst still being close to shops, restaurants and the Tube. She was also looking for at least two roughly equal sized bedrooms and a garden.<\/p>\n<p>The lack of on-market supply saw us tap our off-market contacts, securing a viewing of a partially constructed, ground-floor apartment with a large garden. It matched our client\u2019s criteria perfectly, and our early access gave her some input in the finishes.<\/p>\n<p>We were able to secure the flat for \u00a350,000 below the asking price at a highly competitive \u00a3752 per sq. ft, compared with a going rate for similar properties in the area often in excess of \u00a3875 per sq. ft.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Johnson raises prospects of Stamp Duty cuts Boris Johnson, the frontrunner in the race to become the next Prime Minister, is reported to be mulling cuts to Stamp Duty in an emergency budget, should the UK face a no-deal Brexit. According to a report in The Times, Johnson is contemplating abolishing the tax on homes [&hellip;]<\/p>\n","protected":false},"featured_media":3146,"template":"","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","inline_featured_image":false,"ghostkit_customizer_options":"","ghostkit_custom_css":"","ghostkit_custom_js_head":"","ghostkit_custom_js_foot":"","ghostkit_typography":""},"tags":[],"class_list":["post-3434","market-update","type-market-update","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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