Spring 2017 Newsletter
Here is our latest round up of the current talking points in the London property market.
Basement dig-downs – the rise of the security deposit – A new phenomenon has started to develop recently. The Party Wall act allows neighbours to demand a security deposit from a neighbour digging out their basement, in case something goes wrong. The level of these deposits has risen fast, to the point where they are sometimes perceived as a way to frustrate and delay neighbour’s basement plans. Ten years ago, security deposits were only demanded by less than one percent of builds in central London, now 40 percent make the request. (FT)
What a difference a floor can make – Based on sales figures for the period Jan 2016 to Feb 2017 in W11 and W2 (Holland Park through Notting Hill to Bayswater and Hyde Park), our research indicates that second floor flats are over 10% cheaper than their equivalent ground / 1st floor flats.
But does a second bathroom make a difference? – Based on the same sales figures for the same area, a second bathroom increases the price by 4%.
Taxes – The UK government is planning major changes to the way UK resident non-domiciled individuals are taxed once they have been long-term resident in the UK. The new rules will take effect on the 6 April 2017 and represent “the most fundamental tax change non-doms living in the UK have ever faced”. (Mishcon de Reya)
The market – If the London market, as a whole, has softened over the past year (up to 14% in some area, according to Knight Frank), our day to day experience with searches suggests that the overall picture is not quite as straight forward. We are seeing significant differences in price increase/decrease within an area, even a small area, depending on the price bracket and, unsurprisingly, the quality of the property itself. Just as it was the case in 2007/2008, good properties on good roads are much more resilient than average properties on average roads. Note, however that it is difficult to find comprehensive, hard data to substantiate these impressions, at that level of granularity.
Shoreditch – Just to illustrate the point made above, the area around trendy Redchurch Street in Shoreditch has gone up 13% in the past year, against a backdrop of prices decreasing in the wider London area. (FT)
London is now the UK’s second most expensive city when it comes to buying property, the average property price of £467,000 being 10.5 times the average salary of London residents, which is £44,000. Oxford is the most expensive city, with a ratio of 10.7 (ES)
We very much hope that you find this update concise and informative. However please do let us know if you would rather we did not send this to you.