Whereas the PCL market up to £2million was very strong in the first half of the year, this sector of the market has cooled off and sellers must be realistic and prepared to accept lower offers. Similarly, the top end of the market from £6million upwards has been hard hit and prices really need to come down by 10% or so to absorb the stamp duty increase. It is easy to see why this sector has suffered, up until 4th December SDLT on a £10million property was £700,000 and that was plenty. It is now £1,113,750 - a ridiculous amount of money to pay for what is effectively a rubber stamping exercise at Land Registry.
Kaye & Carey, a Knightsbridge based estate agency and property consultants say that overseas buyers still account for approximately 45% of their transactions in London. However, many do so as a discretionary purchase with no particular urgency and, in a softening market, will often wait until they feel the time is right to re-enter the market or simply look elsewhere to invest.
Three to four bedroom flats, from 1,500 to 3,000 sq ft, converted laterally across two buildings in prime garden squares are the most sought after and buyers will pay from £2,500 to £3,000 per square foot for the best floors of a building, but research suggests that in the prime postcodes of SW1X, SW3 and SW7 there are only a dozen or so available.
Planners are keen to deny owners and developers the right to join two flats to create one larger one as this reduces housing stock so these highly prized lateral conversions are likely to become even more of a rarity and, consequently, hold their value best.
Houses of a similar size in the same areas, by contrast, represent better value as they have to be very good indeed to command much more than £2,200 per square foot.
