London property transactions down after 7% taxThursday, 10 May 2012 08:39
The new seven per cent stamp-duty tax on properties priced more than £2 million is being blamed for a drop in sales in the central London market.
London central prices continue to outstrip the rest of the UK but transaction numbers have started to decline according to the Land Registry.
In figures from the first quarter released today property sales in central London have hit a low.
There were 1,186 transactions during the quarter and only 186 of these were for houses.
This is 38 per cent lower than the average number of transaction for central London.
This is also 57 per cent below peak market levels, a worrying figure following the market recovery in London after the credit crisis.
But the lowered transaction numbers have not stifled prices with the first quarter seeing an increase of 0.6 per cent in the first quarter and a total increase of ten per cent in the past 12 months.
“In our view, the suppression of prices during the credit crunch represented the opportunity of a generation to access prime London central residential at a discount to the true asset value,” Hugh Best, head of investment at LCP said.
“Since 2009/10 we have seen the market recover and London central residential prices are now bang-on trend.
“The market looks set to enjoy another buoyant growth cycle with particular upside in the sector below £2 million.”