The January sales can turn out a few bargains but can the same be said for the London property market at the
start of the new year? Having faced a number of challenges, including bedding in the 2014 stamp duty changes
at the top end of the market, there was a drop in transactions last year and reduced annual price growth. Then the
Chancellor dropped his buy-to-let stamp duty bombshell in the Autumn Statement, adding 3 per cent to each
banding for these investor purchasers, leaving un-certainty over the effect on the market before the April 2016
deadline for sales at the old rate.
Back to the potential January bargains. There is often a stigma attached to price reductions, says Charlie
Bubear, director at Savills Chelsea, but fundamentally sellers understand that their property must stand out from
the competition for the right reasons. Too small a change wont make a difference, but a sensible reduction can
really pick up the momentum.
Matthew Kaye, partner at Kaye & Carey, recently reduced a property in South Kensington by more than 200,000
to 1.895m to encourage interest. We agreed the sale, which also saved the buyer 24,600 in stamp duty, he
adds.
Figures revealed exclusively to The London Magazine by LonRes show that, of the 3,400 properties currently for
sale in prime London, an astonishing 35 per cent have seen a price reduction since they were first marketed. The
proportion of homes reduced by more than 10 per cent of their initial asking price is highest at over 5m (13 per
cent) with 22 per cent of properties seeing their asking prices reduced by more than 100,000, compared to 11
per cent being reduced by 250,000 or more and 3 per cent with drops of 1m or more.
Peter Rollings, chief executive of Marsh & Parsons, lays the blame firmly at the door of stamp duty rises.
High-end sellers are having to cast off their prices to tempt buyers on board. The supply of homes for sale above
1m has been left high and dry with a reduced stamp duty intake for the Treasury as a result which its now
trying to recoup from landlords with the newly announced higher stamp duty on buy-to-let property.
Martin Bikhit of Kay & Co had hoped that the Chancellor would have rebalanced stamp duty rates so that London
homesellers were not so adversely affected by the huge tax liability placed on purchasers and thus their ability to
sell. It is wrong to assume that everyone actually wants to buy [a property] and the second-home and buy-to-let
markets have pumped a huge amount of money into London and provided accommodation for both domestic and
foreign workers for whom renting suits.
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