Brits Dominate Central London Property Purchases As Brexit Fears Bite

There has been a huge shift in the nationalities of property buyers in Central London, figures suggest.

The research from buying agency Black Brick reveals that in the first half of 2018 two thirds of its buyers came from the UK.

This is a significant increase compared with previous years, when less than half of its buyers were from the UK.

Other buyers include those from West Africa (16.6%) and Saudi Arabia (16.6%).

There has also been a shift in the nationalities of vendors, with 66.6% coming from Russia and the remainder from the UK.

Camilla Dell, managing partner at Black Brick, suggested the rise in UK buyers is due to Brits being knowledgeable about what’s happening in the UK economy and political landscape.

“Whilst Brexit and potential political uncertainty are certainly a factor for UK buyers, they are more comfortable about proceeding, particularly when there is a real need to move and get on,” she said.

The agency’s figures also reveal all of the transactions undertaken this year have been for primary homes. In 2017, half of its transactions were for this purpose and in 2016 just a quarter were purchased as a primary home.

Dell said this is a direct result of stamp duty and the additional 3% in tax people now have to spend on a second home or a buy-to-let.

“The consistent rise in the number of our clients purchasing primary homes in Central London indicates that clients are no longer buying for investment, or for discretionary second home reasons, they are buying to live here and choosing London as their home so they are close to work and London’s excellent schooling options,” she added.

This is backed up by new data from HMRC, which shows the tax taken from stamp duty receipts has declined.

The government is collecting less stamp duty than before the changes were introduced, with a total of £1.987 billion raised in the second quarter of this year from receipts in England and Wales. The tax raised £1.999 billion in the third quarter of 2015.

Receipts were even lower in the first quarter of this year at £1.883 billion and peaked at £2.61 billion in the third quarter of last year.

“This is the first time there has been real evidence that supports the notion that higher tax rates do not lead to increase tax take,” said Dell. “Whilst stamp duty remains a political hot potato, we can only hope that Chancellor Philip Hammond takes note of these figures and looks to reduce stamp duty rates at some point in the future.”

Dell said she expects the number of UK buyers to continue to rise in the second half of the year.

“Those who don’t need to move choosing to wait until after Brexit and this is particularly true for international buyers,” she added.

DealMakerz thinks the figures will be welcomed by the British public, who have criticised the sharp rise in property ownership among overseas buyers. Large homes remain empty for most of the year, which is particularly galling in light of the UK’s housing crisis.

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