London house prices hit new high after stamp duty shake-up
01-31-2015
London price: average is now £464,936
Jonathan Prynn, Consumer Business Editor
London’s property market has taken off again after cooling for much of the autumn — with average prices jumping to an all-time high of £464,936 last month.
The surprise 1.8 per cent rise meant the value of the average London home went up by more than £8,000 in December, and was worth £65,000 (16.3 per cent) more than a year previously.
Some estate agents suggested George Osborne’s reforms of stamp duty, which reduced the tax burden for buyers of all homes below £938,000, may already be contributing to the revival.
Those purchasing an average-priced London property save £597 under the new rules, with a stamp duty bill of £13,246, compared with £13,843 under the old system.
The end-of-year bounce came after months in the doldrums, amid fears of a mansion tax, tougher mortgage lending restrictions, and concerns about buying at the top of the market.
The latest Land Registry figures show that while prices in central London are still falling, those in the suburbs have been given fresh impetus. The biggest annual rises were seen in Waltham Forest (25.1 per cent), Newham (24.2), Southwark (23.8) and Lambeth (23.3).
Prices in the four most expensive boroughs — Kensington & Chelsea, Westminster, Hammersmith and Fulham, and Camden — fell in December.
The two-speed market was confirmed by an index launched today by agency Douglas & Gordon. It covers the “emerging prime” neighbourhoods outside the traditional elite “bullseye” areas such as Knightsbridge and Kensington. It shows prices in the long-established elite areas flatlined last year, while those in the inner suburbs rose strongly. The biggest rise was seen in East Putney — 18.6 per cent.
Andrew Monteath, head of research and marketing at D&G Asset Management, said: “These areas are the new Sloane Ranger territory. They would much rather be out and about in Northcote Road [Battersea] than King’s Road these days.”
The abolition of the widely resented “slab system” of stamp duty has also boosted less fashionable areas, while penalising buyers at the top of the market, which faces a 12 per cent rate.
Robert McLaughlin, regional sales director at estate agency KFH, said: “The majority of our customers benefited greatly from the stamp duty restructure. For many, the windfall funded aspects including solicitor’s fees, mortgage fees and movers.”
He said buyers and sellers were “feeling far more positive ... now they are not only paying less tax but are benefiting from low interest rates and a plethora of mortgage products.”
But Campbell Robb, chief executive of housing charity Shelter, said: “Des-pite talk of the market cooling, another rise in house prices means only one thing for priced-out Londoners — the dream of owning a home is slipping even further away.” @JonPrynn