Liquid error: wrong number of arguments (2 for 1) Cash is king in London?s prime property market | Marsh & Parsons Sales and Lettings Estate Agents London

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Cash is king in London?s prime property market

Tue 26 Apr 2016

More than a third of prime London property acquisitions made by buy-to-let investors in the first quarter of the
year were made with no debt, highlighting the importance of cash in powering the market for prime property.
Three-fifths of buyers in the prime market, which is concentrated largely in central London, did not take out a
mortgage when buying their home, according to new research by estate agent Marsh & Parsons.Accounting for
36% of all sales during the first three months of 2016, buy-to-let investors were the most prolific type of purchaser
across prime London, as investors rushed to beat the introduction on 1 April of an additional 3% stamp duty for
anyone owning more than one home.Together, buy-to-let investors and second-home owners accounted for 59%
of all purchases in prime London during Q1. In prime centra London, this figure was even higher reaching
76%.David Brown (pictured), CEO of Marsh & Parsons, commented: "Investors will always be the stalwarts of the
prime London property market its the golden goose of capital returns, and people are still clamouring for a slice
of the action. But second-home owners really jumped to it this spring too, and were much more prominent in the
market than we would typically expect. But this was by no means a typical quarter."Sales activity in the opening
three months of this year has been exceptionally skewed by the additional layer of stamp duty for both buy-to-let
and second-home purchases. Naturally, the knee-jerk reaction among these groups has been to hurry through
property purchases before the deadline, and make savings while they can."The hike in property transactions in
the capitals prime market in Q1 represents a reversal of the recent trend of weakening investor influence. Global
economic turmoil, plummeting oil prices, a relatively strong pound and tax increases for high-value property had
all conspired to paralyse the top end of Londons housing market towards the end of 2015, and many experts
expect that trend to continue over the summer months now that the stamp surcharge has finally been introduced,
as the market rebalances towards first-time buyers and other owner-occupiers unaffected by the extra tax.Hansen
Lu, a property economist at Capital Economics, believes that the outlook for the prime central London housing is
"lacklustre" and that prices in most parts of central London will remain flat or fall."Measures of global financial
wealth and economic performance are better suited to explaining demand pressures in prime London than
standard measures of housing affordability. And the latest data are not encouraging," Lu recently
said.

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