Is It Time to Buy a Home in London Webinar October 18, 2018
A Perfect Storm—UK Property Prices Down Due to: q Brexit Vote 2016 q Weak UK Currency q Major Stamp Duty Increase
Situation Today: Prime Central London property prices are on average 17.6% below 2014 peak … Source: Savills:MiM Prime London residen4al - July 2018
… But even the best locations masks considerable variation and opportunity at an individual property level What matters most? Price Change since June 2014, Performance by Decile, • Quality of property Prime Central London Price • Quality of location Change (proximity to tube, noise 0 levels, etc) -5 • Size of property -10 -15 • Where’s on-trend -20 -25 -30 -35 Best-performing Worst-performing Source: Savills:MiM Prime London residen4al - July 2018
Stamp Duty (One-off Buying Tax) Buy-to-let and second home Stamp Duty Tax Bands Examples Buy-to-let / second Example Price Stamp Duty Effec;ve Rate Brackets Standard Rate home rate (April 2016) Up to £125,000 0% 3% £750,000 £50,000 6.7% £125,001 - 2% 5% £250,000 £1m £73,750 7.4% £250,001- 5% 8% £925,000 £1.5m £138,750 9.3% £925,001-£1.5m 10% 13% £2.5m £288,750 11.6% Over £1.5m 12% 15% Source: HMRC
Maximum Annual Property Tax (Council Tax) • Kensington & Chelsea: £2,246 • Westminster: £1,421
Post-Brexit, the £ is 25% below 2014 levels; and10% below year leading to Brexit vote £ / $ Exchange Rate UK Referendum on Leaving the EU
WHERE to Buy? And Where Not To … ?
Focus on the Prime London Boroughs: Kensington & Chelsea and Westminster
Kensington, Chelsea and Westminster Green Park Knightsbridge Gloucester Road St James’s Park Victoria
Minimum Price Guide • Studio: £500k + • 1 bed: £650k + • 2 bed: £1.2m + • 3 bed: £1.5m + • Mews House: £1.75m +
PROPERTY EXAMPLES
Good properties but … . OVERPRICED: Nice property but started on WRONG AGENT: this agent specializes in the the market for £2.95m—too high! Now high end, high prices—this one-bedroom gem for reduced by 24% and may go down further £650k is excellent value in great location!!
A 2 bed 2 bath flat to avoid • Don’t be tempted by size! It’s loca]on that counts the most! • This flat is on one of the busiest roads in London—a “red route” which means it’s a main route through London. Buses and trucks constantly drive by. • This property appears to be good value at £1.35m for just over 1,000 sq feet, but it needs work and is on a terrible road!
A great 2 bed 2 bath flat • This predy lidle 2 bed 2 bath is located on a beau]ful tree-lined street minutes from Nofng Hill Gate and less than a 15 minute walk to Kensington High Street • Could use a small amount of upgrades but gefng 2 beds and 2 baths (830 square feet) on a prime street for just over £1.3m is predy good.
A new development to avoid • Marketed as prime Kensington but right on the border with Hammersmith, so not near good shops or good transport • On a busy road • Huge development; no character and no soul
A great new development in the heart of South Kensington • Refurbished Victorian building in central South Kensington loca]on—near tube sta]ons, shops, restaurants, museums, etc. • Lots of character • Bou]que development: only 11 proper]es
A mews house to avoid This mews house appears to be fairly good value at £3.25m for over 2,000 square feet and in a convenient South Kensington loca]on, however: • It is on a “working mews”, ie, there are several noisy businesses surrounding it such as a car rental company and car servicing garage • One third of the square footage is in the basement which has no natural light at all and no ven]la]on
A good mews house with potential • This mews house is in a prime South Kensington loca]on and it is over only 2 floors with great light and has a small garden. • It started on the market at over £4m, which was too high, but has been reduced several ]mes and is now on at £2.95m (and nego]able) with 1,800 square feet in excellent condi]on. • A new owner could even add a basement (subject to planning) and increase the size to 2,500 square feet
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