This week, Managing Partner and real estate expert Richard Spector looks at news that foreign buyers are still determined to invest in central London property by the billions of pounds.
The report, published by property agents Cushman & Wakefield, shows that international buyers have planned around £40 billion of investment into the capital, with the majority coming from Asia and the Middle East.
The figures suggest that recent tax changes have failed to deter investors from making a mark in London, despite potentially increasing the costs of a purchase by millions of pounds.
The change, introduced in April 2016, saw a three per cent stamp duty surcharge added tapered on to all “second” homes – properties which aren’t considered your main residence.
The Indexation Allowance, which provides tax-relief for companies’ capital gains, will also be frozen, a move announced in this year’s Autumn Budget. Both measures are designed to make the buy-to-let and investment property market less attractive, but so far they appear to have had little effect.
Cushman & Wakefield estimate that sales this year will “comfortably surpass the total £16.96 billion spent in 2016.
“Whilst the recent budget changes to commercial real estate capital gains tax have been unwelcomed by investors, in reality it does bring the UK in line with the majority of other jurisdictions, and it is expected that London’s appeal will outweigh these concerns in 2018,” said Fergus Keane of Cushman & Wakefield.
Mr Keane added that the capital’s “safe-haven” status, legal structure, and the weaker pound have kept investment in London competitive.
About Richard Spector: Managing Partner Richard specialises in property transactions and commercial litigation. Richard has acted in a number of high-profile cases and was heavily involved in the litigation that arose from the collapse of Lehman Brothers. Richard has been involved in a number of cross-border litigation cases and recently acted successfully for the Claimants in Harlequin Property (SVG) Ltd & Anr v Wilkins Kennedy, listed in the Lawyer’s top 20 cases of 2016.
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